Last updated on September 8th, 2021 at 08:48 pm
The furore over the ban on the use of bank account to fund cryptocurrency trading activities isn’t over.
As we write some bank accounts have been banned for using their accounts to fund or receive bitcoin payment.
You may be wondering how can ban detect if you’ve used your bank account for trading in cryptocurrency.
It’s very important to know if the Central Bank of Nigeria (CBN) has the power to ban cryptocurrency. Can any institution ban crypto trading?
Can the CBN stop Crypto trading?
No bank has the power to stop cryptocurrency trading, however, the apex bank has the power to issue regulations to cage crypto trading.
The CBN has control over the banking sector, it can use its powers to determine how commercial banks allow customers to use their bank accounts for transactions.
Cryptocurrencies like bitcoin, ethereum, litecoin, bitcoincash, ripple etc are a digital form of currency which relies majorly on the fiat currencies.
From funding crypto wallet to exchange to fiat currencies and to how its ownership is being determined.
How CBN Will Catch You If Your Bank Account Is Used for Cryptocurrency Trading
Most of the cryptocurrency trading platforms in Nigeria allowed you to link your account to your account.
Through this, it made it simple to fund and withdraw to your conventional bank account.
Banks use the Know Your Customer (KYC) information to determine if your bank account has been used for cryptocurrency-related transactions.
Once the bank determines this, your account can be blocked so as to restrict anyone from depositing money into the accounts.
The bank can also use your bank Verification Number (BVN) to track and determine where the funds are coming from and they are being utilized.
Your account could also be flagged if the inflow into your account is suspicious or it’s strange.
How to know if your bank has blocked your account
If you made a transfer and you noticed your transaction is hanging for hours, a no-debit may have been placed on your account.
What does this mean?
This means that when you transfer money to a cryptocurrency trading platform, the money will not be delivered.
You may unable to access your account again until you visit the bank to make clarifications if you think your bank account was wrongly flagged.
Consequences of cryptocurrency ban in Nigeria
The recent directive by Nigeria’s apex bank will definitely have negative consequences for the international crypto community.
Before now, Nigeria is Africa’s largest trading in bitcoin and second in the global market.
Peer-to-peer cryptocurrency platforms (P2P) may be the way to go, but the CBN could still track your deposits.