Moniepoint, Paga to Block Millions of Customers Involved in Crypto

In what comes as a major shock to Nigeria’s fast-rising cryptocurrency sector, two of the country’s popular financial technology companies, Moniepoint and Paga, have revealed plans to restrict access to the accounts of customers found to be guilty of carrying out cryptocurrency dealings. 

This move was occasioned by a recent Central Bank of Nigeria circular that is largely interpreted as a reminder of a previous ban on cryptocurrency transactions in Nigeria.

CBN Circular Reignites Crypto Ban Debate

The CBN’s circular, referenced as FPR/DIR/GEN/CIR/06/10, reportedly reminds financial institutions that “dealing in or facilitating transactions in cryptocurrency and other virtual currencies is not permitted.” 

This action by the apex bank reopens the debate surrounding cryptocurrency in Nigeria, a nation where digital assets have seen a surge in popularity in recent years. 

While the 2021 CBN ban on cryptocurrency transactions by banks was widely interpreted as a blanket ban, the exact legal status of crypto in Nigeria has remained somewhat ambiguous. 

Many Nigerians have continued to participate in the cryptocurrency market through peer-to-peer (P2P) exchanges and foreign platforms, a trend that Moniepoint and Paga now appear set to curb.

Moniepoint Trading Crypto: Millions of Customers Potentially Affected

The potential effect of Moniepoint and Paga’s action will be extensive. 

Both companies have millions of customers all over Nigeria, and it can be expected that a significant percentage of those will have at least some level of involvement in the use of cryptocurrencies. 

This new policy leaves a question of how the companies are going to monitor the activity and what will be the reasoning to terminate certain accounts.

Read More: Naira’s Unending Fall: Nigerian Authorities Ban Access to Crypto Exchanges

Customer Concerns and Regulatory Uncertainty

Meanwhile, the customers of Moniepoint and Paga have various anxieties about the policy. 

They are uncertain about what will be known as “facilitating crypto transactions,” even if holding the currency in one’s personal wallet will result in account closing. 

Moreover, the absence of defined mechanisms for CBN and the information from the fintechs exacerbates people’s fear.

Moniepoint Trading Crypto: Impact on Nigeria’s Fintech Landscape

The actions of Moniepoint and Paga, however, might become a chilling precedent for Nigeria’s nascent fintech industry. 

It is mostly due to the involvement of cryptocurrency as one of the main rejuvenation triggers of the business. 

A significant number of startups in the industry are acting as intermediaries to different crypto transactional services. 

The withdrawal of millions of customers will not allow them to mature.

Looking Ahead: Questions Remain

The CBN’s stance on cryptocurrency is increasingly being perceived as rigid, and numerous financial institutions have adopted this narrative. 

As a result, the future of crypto trading in Nigeria is in question. It is speculative whether the CBN clarifies further on these regulations or how Moniepoint and Paga will enforce their new policies. 

The days and months ahead will be critical for the crypto ecosystem and the country’s increasingly important fintech sector.

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