(West Africa) (3 Minutes Read)
Nigeria’s central bank has lifted a ban on transacting in cryptocurrencies while saying global trends had shown a need to regulate such activities, the bank said in its latest circular. The country has been trying to find a middle ground between an outright ban on crypto assets and their unregulated use.
Nigeria’s central bank has lifted a ban on transacting in cryptocurrencies while saying global trends had shown a need to regulate such activities, the bank said in its latest circular. The country has been trying to find a middle ground between an outright ban on crypto assets and their unregulated use.
The Central Bank of Nigeria (CBN) in February 2021 barred banks and financial institutions from dealing in or facilitating transactions in crypto assets, citing money laundering and terrorism financing risks. Subsequently Nigeria’s Securities and Exchange Commission (SEC) in May last year published regulations for digital assets that signaled Africa’s most populous country was trying to find a middle ground between an outright ban on crypto assets and their unregulated use.
In a circular dated December 22, the CBN said current trends globally have shown there is a need to regulate the activities of virtual asset service providers (VASPs), which include cryptocurrencies and crypto assets. The latest guidelines spell out how banks and financial institutions (FI) should open accounts, provide designated settlement accounts and settlement services, and act as channels for forex inflows and trade for firms transacting in crypto assets. VASPs would need to be licensed by the Nigerian SEC to engage in the crypto business.
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From the commencement of these Regulations, Fl shall not open or permit the operation of any account by any person or entity to conduct the business of virtual/digital assets unless that account is designated for that purpose and opened in line with the requirement of these Guidelines. But banks were still barred from trading, holding or transacting cryptocurrencies, stated CBN.
