Nigeria slaps hefty fines on banks allowing crypto transactions as e-Naira popularity wanes

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Access Bank, Stanbic IBTC fined over customer transactions

Nigerians are trading crypto assets despite restrictions

Nigeria’s central bank fined lenders for failing to comply with regulations that bar customers from transacting in cryptocurrencies.

Meanwhile On October 25, 2021, Nigeria launched its central bank digital currency (CBDC) — the eNaira. Development began in 2017 with the identification of possible functions. The Central Bank of Nigeria (CBN) then partnered with Bitt, a fintech company based in Barbados, to develop eNaira.

Also data gathered from Google is saying

Google Trends is a valuable search trend feature that displays how frequently a specific search phrase is entered into Google’s search engine in comparison to the site’s total search volume over a specified period.

According to the data, interest in the eNaira has fallen to historic lows, similar to regions before the announcement of the eNaira.

October 24-30, 2021, according to data, interest in the eNaira was at 43, while interest in cryptocurrencies was at 41.

However, the interest on eNaira as of March 20-26, 2022 was at less than 1 index point compared to the 43 index points had on October 24-30, 2021.

Yobe, Kano Adamawa, Zamfara, and Jigawa states are currently the most interested in eNaira. While Ebonyi, Anambra, Enugu Kano, and Akwa Ibom led the way in cryptocurrency interest

However, the flagship cryptocurrency, Bitcoin, continues to pique Nigerians’ curiosity above searches on eNaira and cryptocurrency searches. Anambra, Delta, Bayelsa, Edo, and Ebonyi were among the states that were interested in bitcoin.

The penalties are part of efforts by the central bank to ensure commercial lenders implement a February 2021 order to block trading in cryptocurrencies because of the threat that it says they pose to Nigeria’s financial system. In November, it ordered lenders to close the accounts of two individuals and a company for allegedly trading in the digital coins.

The West African nation accounts for the largest volume of cryptocurrency transactions outside the U.S., according to Paxful, a Bitcoin marketplace. Africa’s most populous country also has the largest proportion of retail users conducting transactions under $10,000, according to Chainalysis.

The Central Bank of Nigeria fined Stanbic IBTC Bank, the domestic unit of Standard Bank Group Ltd., 200 million naira ($478,595) for two accounts alleged to have been used for crypto transactions, Chief Executive Officer Wole Adeniyi said Tuesday during an investor conference call in Lagos.

Access Bank Plc, the country’s biggest lender by assets, was fined 500 million naira for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Ltd. United Bank for Africa Plc incurred a 100 million naira penalty for digital-currency transactions by a customer while Fidelity Bank Plc was fined 14.3 million naira, the lenders said.

While Stanbic IBTC followed the central bank directive, the transactions it was sanctioned for may have passed through its system undetected, Adeniyi said. The central bank was able to detect the relevant transactions using an “advanced capability” that Nigerian lenders don’t have access to, and they’ve asked the central bank to share the technology, he said.

“It doesn’t seem that they are going to entertain a refund, but they are now sharing intelligence with us to be able to kind of deter clients.”