On 5 February 2021, the Central Bank of Nigeria (CBN) issued a Reminder to banks, non-bank financial institutions and financial institutions that dealing in cryptocurrencies or facilitating cryptocurrency exchanges was prohibited, ordering an immediate stop to such transactions.

The apex bank further directed the immediate closure of bank accounts belonging to persons and/or entities transacting in cryptocurrency or operating cryptocurrency exchanges.

In response to heated and adverse market reactions, the CBN published a press release dated 7 February 2021 to justify the rationale behind its earlier regulatory directive on cryptocurrencies, reiterating that cryptocurrencies are not legal tender in Nigeria.

In our FinTech Update, we have set out what we consider to be recurring questions and have provided brief responses based on our understanding of the Letter and the regulatory landscape in Nigeria.