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Nigeria’s apex bank lifts ban on cryptocurrency transactions 

The Central Bank of Nigeria (CBN) has lifted the ban on cryptocurrency transactions in Nigeria. 

A view shows Nigeria's Central Bank headquarters in Abuja
A view shows Nigeria's Central Bank headquarters in Abuja, Nigeria November 22, 2020. Picture taken November 22, 2020. Credit: REUTERS/Afolabi Sotunde

Abuja, Nigeria

The Central Bank of Nigeria (CBN) has lifted the ban on cryptocurrency transactions in Nigeria. 

CBN said on Friday that commercial banks can now accept crypto assets in the country and asked the banks to disregard its earlier ban on crypto transactions.

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The director of the Financial Policy and Regulation Department of the CBN, Haruna Mustafa disclosed this in a circular dated December 22, 2023, with reference number FPR/DIR/PUB/CIR/002/003.

The circular is tagged ‘Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS).’

The apex bank stated that current trends globally showed the need for crypto regulation.

“The CBN in February 2021 issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers in view of the money laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent in their operations as well as the absence of regulations and consumer protection measures.

“However, current trends globally have shown that there is need to regulate Virtual Assets Service Providers (V/ASPs) which activities of virtual assets service cryptocurrencies and crypto assets. Following this development, the Financial Action Task Force (FATF) in 2018 also updated its Recommendation 15 to require VASPs to be regulated to prevent misuse of virtual assets for ML/TF/PF Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution,” the circular reads.

“In addition, the Securities and Exchange Commission in May 2022 issued Rules on Issuance, Offering and Custody of Digital Assets and VASPs to provide a regulatory framework for their operations in Nigeria.

“In view of the foregoing, the CBN hereby issues this guideline to provide guidance to financial institutions under its regulatory purview in respect of their banking relationship with VASPs in Nigeria.”

CBN noted that this new guideline supersedes its old ones referenced FPR/DIR/GEN/CIR/06/010 of January 12, 2017, and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 on the subject.

The apex bank maintained that banks and other financial institutions are still prohibited from holding, trading and/or transacting in virtual currencies on their account.

It added all banks and other financial institutions are required to immediately comply with its new guidelines. 

In its circular with reference number BSD/DIR/PUB/LAB/014/001, dated February 5, 2021, the apex bank reminded banks that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges was prohibited.

At the time, it asked banks to identify persons or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that their accounts were closed.

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