The Central Bank of Nigeria has issued regulations for banks that facilitate crypto transactions
Almost two years after the Central Bank of Nigeria (CBN) imposed a blanket ban on banks dealing with digital currencies, it has now lifted restrictions on Nigerian banks facilitating cryptocurrency transactions.
In the year In a circular sent to banks on December 22, the CBN noted that the increasing global demand and adoption of crypto makes it inappropriate to maintain strict restrictions on financial institutions in 2021.
The statement said.
“However, current trends have shown the need to regulate activities involving cryptocurrencies and crypto-assets by virtual asset service providers (VASPs) globally.”
Nigeria's CBN has removed restrictions on cryptocurrency trading. The original 2021 order banned banks from crypto-related transactions. The latest circular, however, provides clear guidelines in favor of crypto, but with strict customer KYC and anti-counterfeiting checks. pic.twitter.com/XCRc7fjz9Y
— Abubakar (@IAtalkspace) December 22, 2023
The directive is to establish minimum standards and requirements for establishing banking relationships and opening accounts for Virtual Asset Service Providers (VASPs) in Nigeria.
The guidelines also aim to ensure robust risk management practices regarding the activities of licensed VASPs in the banking industry.
However, the statement emphasized that financial institutions are still prohibited from holding, trading or making transactions in cryptocurrencies using their own accounts.
In the year In February 2021, Cointelegraph reported that the Central Bank of Nigeria had banned all regulated financial institutions from providing services to crypto exchanges in the country.
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Meanwhile, in recent news, the local blockchain industry has called on the Federal Government of Nigeria to enact laws that encourage widespread integration of blockchain policy in the country.
The President of the Blockchain Association of Nigeria (SiBAN) Stakeholders, Obina Inuno, recently stressed the need to establish a regulatory framework to accelerate the infusion of blockchain technology into various sectors of the economy.
Isuno told Cointelegraph that Nigeria is fully equipped to implement blockchain technology:
“We are now ready for full adoption, and the blockchain policy initiated by the government, if fully implemented, will position Nigeria as a trailblazer in the continent's digital economy landscape.”
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