Several major Nigerian fintech platforms are warning customers that their accounts will be blocked if used for cryptocurrency transactions. The crackdown comes amid mixed messages from the country's central bank around regulating digital assets.

Platforms like Moniepoint, PalmPay and Paga have all issued notices stating that any accounts facilitating crypto buys, sells or payments will face account closures and potential reporting to authorities. Moniepoint explicitly cited complying with Central Bank of Nigeria (CBN) regulations as the reason.

The warnings represent a stark reversal from guidance the CBN issued in December 2023. At that time, the central bank directed banks and financial institutions to allow account opening and provide services to firms dealing in cryptocurrencies.

December Guidance Contradicted The December circular stated it superseded prior CBN communications from 2017 and 2021 that had prohibited banks from working with crypto companies and users.

However, some of the fintech crackdown notices have referenced the older 2017 circular prohibiting banks from dealing with crypto businesses and customers.

One PalmPay user reported having their account frozen until agreeing to sign a document pledging to abstain from all crypto activity.

The conflicting policy signals reflect ongoing regulatory confusion and lack of cohesive crypto legislation in Nigeria despite its significant adoption levels.

While the CBN had signaled openness to regulated crypto banking in late 2023, industry experts criticized guidance since released as overly restrictive. Proposed rules included extreme capital requirements that could price out local startups.

Recent Renewed Hostility Tensions reignited in February 2024 when the Nigerian government restricted local access to major crypto exchange websites via telecom providers. This occurred without any official policy updates.

The CBN also denied reports in April that it ordered banks to identify crypto users and restrict their account activity for six months. However, some industry voices claimed the crackdown notices from fintechs indicated the opposite may be happening.

As Africa's largest crypto market by trade volume, Nigeria's piecemeal approach toward regulation has created an ambiguous operating environment for both users and businesses. Clear rules are still lacking despite apparent renewed hostility from authorities in 2024.

The varying fintech responses reflect the tightrope companies must walk amid the inconsistent signals coming from regulators. Robust, transparent dialogue is still needed between public and private sector stakeholders.