Nigeria's central bank has turned its attention to commercial banks and other financial institutions operating in the country in its campaign against the use of digital currencies such as Bitcoin.

The CBN notes in the circular that though the emergence of these digital currencies has attracted investments in payments infrastructures which provides new methods of transferring values over the internet, they are largely untraceable and anonymous making them susceptible to abuse - including money laundering and supporting terrorism.

The Bank, as well as other financial-related bodies in the country like the Securities and Exchange Commission and the Nigeria Deposit Insurance Corporation, have in the past warned citizens to be cautious about investing in digital currencies, especially in the wake of the MMM scheme craze.

The argument is that the schemes that offer digital currency-related transactions in the country are not registered to provide such services and Nigerians' investment in such entities could be exposed to risks which could not be redressed.

Pending substantive regulation or a decision, the top bank says in the circular that it wants all financial institutions in the country to take certain actions to protect the integrity of the Nigerian financial system.

They include ensuring that they do not use, hold, trade and/or transact in these currencies; ensure that existing customers comply with identification, verification and transaction monitoring requirements; discontinue relationship with a customer/exchange that defaults on their control system; and report suspicious transactions to the Nigerian Financial Intelligence Unit.

The circular states: "The CBN reiterates that VCs (virtual currencies) such as Bitcoin, Ripples, Monero, Litecoin, DogeCoin, OneCoin etc, and similar products are not legal tenders in Nigeria, thus any bank or institutions that transact in such businesses does so at its own risk."

The need to take this precautionary measure that the CBN is sounding is similar to what is being issued by other central banks in various parts of the world.

There has not been any record yet of any institution of the world, be it in the public or private sector, that has been able to regulate how digital currencies - with the most important of them presently being Bitcoin - could be used.

If replies to a tweet by the CBN to inform its more than 60,000 followers of the circular to banks is anything to go by, knowledge of digital currencies is still low in Nigeria. Four of the seven respondents so far sought to know more about the currencies while the remainder three are not against them.

One of the respondent writes: "Those VCs are getting more popular by the day. Go and find out from China what they are doing with them."