The Union Bank of Nigeria PLC is the sixth largest bank by asset in Nigeria. They have issued a general notice about monitoring the client’s cryptocurrency trading activities closely. In the worst case, the accounts might even become a subject to restrictions moving forward.
Is cryptocurrencies a part of banks and the future of Nigeria?
Cryptocurrency is a hot topic in Nigeria. A few days ago, Presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar talked about the new technology. He said that the federal government in Nigeria would support blockchain and cryptocurrencies if he becomes the president in 2019. He wants to speed up the economy and argues that blockchain and cryptocurrencies will help his plans to become a reality. However, for cryptocurrencies to be allowed, regulation is needed.
He said: “In harnessing the potentials of the new economy, we shall promote the Production of a comprehensive policy on blockchain technology and cryptocurrencies by the relevant government agencies. The terms of this mandate will ensure that these areas are regulated. Also, to manage the area in a way that provides job opportunities as well as income for the government and people of Nigeria.”
Union Bank announcement harsh on cryptocurrencies.
Union Bank of Nigeria PLC became locally owned 1979, and Barclays Bank was previously the owner. The bank has a long history, going back over 100 years, and is one of the oldest banks in Nigeria. Ranked as Africa’s 14th largest bank and the worlds 556th largest.
Even though Abubakar argues that cryptocurrencies and blockchain is a big part of the economic future, some banks take an opposite stance. Union Bank of Nigeria PLC recently announced that cryptocurrencies are not a legal tender and warned its clients of transactions in them.
“Dear Customer, The Central Bank of Nigeria (CBN) has advised that cryptocurrency is not a legal tender in Nigeria. They have cautioned against transacting in them. To guarantee the security of our customers’ funds, Union Bank will monitor accounts for cryptocurrency transactions. The bank will implement restrictions including the closure of such accounts. We appreciate your patronage, and we are committed to providing you with more straightforward, smarter banking services that best protect your interest and guarantee the security of your funds.”
However, it is important to note that while banks have issued several documents arguing that cryptocurrencies are not a legal tender in Nigeria. Banks have also never recommended any regulatory actions against the holders. They have always stated that clients transact cryptocurrencies at their own risk. An exciting story, earlier covered by Toshi Times, says that bitcoin is becoming a currency of Nigerian entrepreneurs. People in business in the African nation have begun dealing in bitcoin. It is a more stable medium of exchange than Nigeria’s national fiat currency.