Bitcoin is not a legal tender in Nigeria – CBN

Bitcoin is the most popular digital currency and has soared in value from 4 cents in 2010 to $19,000 by December 2017.

Digital currencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, OneCoin e.t.c are reiterated as not backed by law in Nigeria.

It noted that any financial institution or business that transacts in such currency does so at its own risk.

Bitcoin and other digital currencies are developed to provide freedom from regulatory control, less cost of maintenance and ease of use for commercial transactions. But, there are concerns about their degree of safety as they are not backed by any assets.

In 2017, Nigeria’s financial market regulators - CBN, Securities and Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation (NDIC), were increasingly enlightening people on the risks of cryptocurrencies. The CBN specially raised that virtual currencies are largely used in terrorism financing and money laundering.

“Virtual currencies are traded in exchange platforms that are unregulated, all over the world. Consumers may there lose their money without any legal redress in the event these exchangers collapse or close businesses. The attention of bank and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN,” said the CBN in a statement.

Of all digital currencies, Bitcoin is the best performing and with the highest value. Between 2010 and 2017, the digital coin appreciated from 4 cents to $19,000 by December 2017.

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