Global crypto funds soar despite CBN hammer on Nigerian banks

JUST AS NAVI GATING THE VOLATILE crypto market can be very tricky for even experienced investors, the growth of crypto assets and investments has continued to gain momentum year to date as the asset continues to fight its way back to higher heights and close to its all-time highs since discovery in 2009.

Data obtained from CoinMarketCap shows that global crypto market capitalisation rose 7.5 percent over the past week to $2.14 trillion, while the week closed with Bitcoin gaining four percent higher at $46,281. And data from Glassnode further revealed that Bitcoin accumulation among long-term holders was near alltime highs. Also, data from CoinShares also showed that Crypto funds drew inflows for a second straight week, last week.

In Nigeria, the apex bank, after its warning to deposit money banks (DMBs) in February 2021 to desist from the facilitation of the digital assets trade through their counters or platforms, has placed a fine of N800 million on Access Bank, United Bank for Africa (UBA) and Stanbic IBTC for flouting the CBN orders by their failure to block and report customers’ accounts linked to crypto trading.

A circular signed by Bello Hassan, director for banking supervision, and Musa Jimoh, director of the payment system management department, said: “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.

“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately,” the statement reads.

In a Bloomberg monitored report, Access Bank Plc was fined N500 million for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Ltd. United Bank for Africa Plc incurred a N100 million penalty for digital-currency transactions by a customer, while Wole Adeniyi, the CEO of Stanbic IBTC Bank revealed during a recent investors’ call by the bank that it was fined N200 million for two accounts alleged to have been used for crypto transactions.

But Adeniyi defended his bank by saying, despite the fact that Stanbic IBTC followed the central bank directive, the transactions it was sanctioned for may have passed through its system undetected and further stated that the CBN was able to detect the relevant transactions using an “advanced capability” that Nigerian lenders do not have access to, and they have asked the central bank to share the technology.

Away from the Nigerian banks, the adaptability of cryptocurrency across the globe has seen the asset’s market cap grow further despite the recent bearish outing reported for Bitcoin in the early days of 2022.

With the acceptance gaining wider strength, reports indicate that Rio De Janeiro, Brazil’s most populous city, will become the country’s first city to accept property tax in crypto, starting in 2023.

Meanwhile, as reported last week by Binance, a leading crypto coins trading platform, the BTC closely followed the S&P 500 in quarterly performance, down two percent as against the 5.5 percent for the S&P. Also, the Terra Foundation added $135 million worth of Bitcoin to its reserves, taking their total BTC purchases for the year to more than $1 billion.