The Central Bank of Nigeria (CBN) has recently suspended the provision of the bank validation number (BVN) service to all fintech and third-party partners. The decision means non-banks entities include crypto startups “have lost one of the most comprehensive means of identity verification in the country.”
New Identification System
Before the latest decision, the CBN accepted the use of the BVN alongside any other acceptable identity documents for KYC purposes. According to the apex bank, this service helped to “check risk and determine whether or not there is an element of money laundering, fraud and other corruption-related activities.”
However, as one local media report explains, the central bank’s sudden decision may be linked to the Federal government’s determination to change Nigeria’s identification system. The report says:
Over the last few months, the Federal government has been changing the unique means of identification of all agencies, parastatal and industries to National Identification Numbers (NIN). Examples include UTME/ JAMB registration, voter registration, Banks and SIM cards.
Nevertheless, the report still warns that the removal of the BVN service could potentially “increase the cost of onboarding customers.”
Following reports of the suspension of the BVN service, Bitcoin.com News sought the views of some players in Nigeria’s crypto industry. Most of the players agree the suspension is not specifically targeted at the crypto industry. However, some are adamant the move is just a continuation of CBN policies that seek to stifle innovation and to block young people from participating in the economy.
Nathaniel Luz, a cryptocurrency thought leader, characterizes the CBN’s latest decision as a clash between “old and new money.” He adds that the suspension of the BVN service shows that the CBN continues to use the same playbook to frustrate the Nigerian youth. In a post on Facebook, Luz…