Following the recent directive by the Central Bank of Nigeria (CBN) that commercial banks should close accounts related to cryptocurrency, the International Monetary Fund (IMF) has thrown its weight behind the apex bank’s decision.
The CBN had also warned deposit money banks and other financial institutions against dealing with cryptocurrency exchanges, stating that the digital asset was not a legal tender in Nigeria.
According to the IMF, the caution shown by Nigeria’s monetary authority is warranted due to the risk in cryptocurrency. The IMF made its reservation known in the 2020 Article IV IMF Staff Report for Nigeria.
In the report, the Resident Representative of IMF for Nigeria, Ari Aisen, said the use of cryptocurrencies raises concern as bitcoin and other digital assets could be used in illegal activities such as money laundering and drug peddling.
“The issue with some of the cryptocurrencies is that perhaps some care should be taken about their activities. The use of cryptocurrencies is a concern.
That is why some central banks, not only in Nigeria, have these concerns about what kind of activities these cryptocurrencies are put and how best to monitor those activities”, the report indicated.