Nigeria’s Central Bank Revokes Licenses of Over 4,000 Bureau De Change Operators in Regulatory Crackdown

In a significant move, Nigeria’s Central Bank has taken strict action by revoking the licenses of more than 4,000 Bureau De Change operators (BDCs).

This decision follows recent rule changes governing BDC operations, with the affected operators allegedly failing to meet financial obligations and comply with anti-money laundering and terrorism financing regulations, as stated by the apex bank.

Non-Compliance and Rule Violations: Reasons Behind License Revocation

The Central Bank disclosed that the revoked operators failed to fulfill crucial requirements, including the payment of necessary fees, submission of returns, and adherence to anti-money laundering and terrorism financing regulations.

In response to this, the apex bank emphasized its commitment to revising regulatory and supervisory guidelines for BDC operations in Nigeria, with strict compliance becoming mandatory under the upcoming revised guidelines.

Swift Reversal: Central Bank’s U-Turn on Dollar Sales to Eligible BDCs

Just four days before the license revocation, the Central Bank made a significant policy reversal by ending its three-year stance on selling dollars to eligible BDCs.

This decision was prompted by the release of new rules for BDCs, demanding increased transparency.

Under these rules, operators must engage external auditors, digitally integrate with the CBN, and link transactions to an active bank verification number (BVN).

Additionally, the Central Bank raised minimum capital requirements for BDCs.

Central Bank’s Measures: Insight into Parallel Market Transactions and National Security Concerns

The Central Bank’s multifaceted approach aims to gain insight into transactions within the parallel market.

Recently released rules, coupled with the increased capital requirements, underscore the regulator’s efforts to enhance transparency and accountability within the BDC sector.

The National Security Adviser’s (NSA) involvement, leading to the arrest of two Binance executives, further highlights the government’s scrutiny of transactions, particularly in peer-to-peer trading of the USDT/NGN.

Governor’s Statement: Bringing Sanity to the Industry

CBN Governor Olayemi Cardoso, in response to the regulatory changes, expressed the objective of bringing “sanity” to an industry that may no longer be serving the interests it was meant to protect.

The governor emphasized the need for these measures during a recent rate-setting meeting, positioning the regulatory actions as essential for the industry’s integrity and public interest.

Impact on Currency Traders: Fear of Arrest Spurs Shift Away from Street Trading

Reports indicate that the fear of arrest by Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC), has prompted currency traders to shift away from street trading.

This development further underscores the broader impact of regulatory changes on the behavior and practices of currency traders in the country.

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