The Central Bank of Nigeria (CBN) has taken the decisive step of revoking the licenses of 4,173 Bureaux De Change Operators, citing their failure to adhere to regulatory provisions. This action, announced in a statement on Friday by the bank’s Acting Director of Corporate Communications, Sidi Ali Hakama, aims to restore confidence in the nation’s foreign exchange market.
According to the apex bank, the affected BDC operators’ list is available on its website. The CBN stated its intention to revise the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria, making compliance with the new requirements mandatory for all stakeholders in the sector.
The CBN justified its action as an exercise of the powers vested in it under the Bank and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, and the Revised Operational Guidelines for Bureaux De Change 2015 (the Guidelines). These guidelines encompass various requirements such as timely payment of fees, including license renewal, adherence to reporting obligations, and compliance with anti-money laundering and counter-terrorism financing regulations.
Economic Context and Cryptocurrency Concerns
Nigeria currently grapples with a myriad of economic challenges, including rising inflation, food inflation, foreign exchange crisis, economic hardship, and the high cost of living exacerbated by the removal of petrol subsidy, which has incited protests across the country.
The value of the Nigerian naira has depreciated significantly over the past nine months since the administration of President Bola Tinubu closed the foreign exchange window, plummeting from approximately N700/$1 in May to over N1500/$1 currently.
In response to these economic difficulties, authorities have intensified scrutiny on cryptocurrency websites, with a particular focus on Binance. Governor Olayemi Cardoso of the CBN expressed concerns over illicit flows through crypto exchanges, highlighting Binance Nigeria’s involvement in transactions totaling $26 billion in the past year, with sources and users remaining unidentified.
Government Response and Calls for Compliance
Presidential spokesman Bayo Onanuga emphasized the government’s determination to counter illicit financial activities facilitated by cryptocurrency platforms, portraying them as potential threats to Nigeria’s economy. Onanuga warned against relying on the parallel market for foreign exchange rates, urging Nigerians to utilize the CBN’s official platform for accurate rates.
He asserted that stabilizing the exchange rate would lead to a normalization of prices, particularly by curbing arbitrary pricing practices among importers. Onanuga expressed optimism that the government’s efforts would yield positive outcomes for the economy in the coming weeks.
As Nigeria navigates its economic challenges, the CBN’s revocation of BDC licenses underscores the importance of regulatory compliance in restoring stability to the foreign exchange market and fostering economic resilience.
Credit: Channels TV