Nigerian Central Bank Halts Fintech New Accounts To Curb Crypto Trading

The Nigerian Central Bank has requested four fintech companies to pause creating new accounts in a bid to block crypto traders from accessing them.

As per a report from Nigerian news outlet Techcabal, the Central Bank of Nigeria (CBN) has directed four key players in the fintech sector, namely, Moniepoint, Palmpay, Opay, and Kuda, to cease opening new accounts. These companies play a crucial role in facilitating crypto trading in Nigeria.

An executive familiar with the development was cited, stating that this was a temporary suspension. A statement from one of the affected firms cited in the report also confirmed this.

The report added that the directive came shortly after the Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-graft body, blocked over 1,140 bank accounts allegedly associated with illicit foreign transactions.

Another source added that the CBN had already engaged with the affected firms prior to issuing the directive. According to the source, the CBN believes that cryptocurrency traders were “leveraging the fintech platforms to disrupt the FX market.”

He went on to add that CBN has yet to improve its “perception” of these fintech firms compared to traditional platforms like banks, which already have a “better relationship” with the regulator. 

With the Naira struggling, regulators have blamed cryptocurrencies for the nation’s economic struggles. Specifically, the Presidential aide Bayo Onanuga blamed Binance for setting the exchange rates for Nigeria, which reportedly funneled more than $26 billion out of the economy.

The current directive comes days after the CBN denied claims that it had mandated local banks freeze accounts linked with unlicensed crypto service providers in the nation. According to initial reports, the regulator had placed crypto exchanges under a “Post No Debit (PND) instruction” for six months.