The Central Bank of Nigeria’s (CBN) circular has created chaos and uncertainty within the Nigerian community especially with those who deal in cryptocurrency in their day to day business activities. It is pertinent to note that from this circular, the CBN has only prohibited the dealings and/or facilitations of payment with cryptocurrency through regulated institutions such as financial Banks in Nigeria and same is within the regulatory powers of the CBN as provided by the Banks and Other Financial Institutions Act (BOFIA) and the Central Bank of Nigeria (Establishment) Act 2007. Opinion
The legality of the CBN’s circular is questionable to the extent that it directs financial institutions to close accounts of persons and entities engaging in the exchange of crypto currency without an enabling law prohibiting same. Pursuant to the CBN’s circular, it will be illegal for any financial institution in Nigeria to freeze/close customers’ account without a proper order of court. Also, no person or institution, no matter how highly placed or powerful is allowed to take laws into its hands else it may descend into chaos. See FIDELITY BANK PLC V. BAYUJA VENTURES LIMITED & ANOR (2011) LPELR-8873(CA) and GOVERNOR OF LAGOS STATE V. OJUKWU (1986) All NLR 235
Therefore, the CBN as a regulatory authority to financial institutions in Nigeria can only prohibit them from entertaining, engaging or facilitating payments with cryptocurrency through their system/platform. Notwithstanding the CBN’s circular, individuals and entities should legally be able to exchange and/or facilitate payments with cryptocurrency using a peer to peer mechanism without the use of financial institutions in Nigeria as cryptocurrency (regarded as form of digital asset) is basically structured to aid peer to peer transactions. This peer to peer transaction may be valid except the Nigerian National Assembly passes an enabling law to make such transaction illegal.