CBN Lifts Ban on Crypto Transactions In Nigeria, Introduces New Rules for Access, UBA, Zenith others
- The CBN has finally lifts ban on cryptocurrency transactions in Nigeria's financial system
- The apex back have also introduces new guidelines to financial institutions for crypto transactions
- The popular cryptocurrencies in Nigeria include Bitcoin, Ethereum, doge coin and also dash and ripple
Legit.ng journalist, Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Central Bank of Nigeria has lifted its restrictions on cryptocurrency transactions in commercial banks.
This is according to a circular dated December 22, 2023with reference number FPR/DIR/PUB/CIR/002/003 and signed by Haruna Mustafa the apex bank’s Director, Financial Policy and Regulation Department.
Source: Getty Images
The statement titled ‘Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS).’ also introduced stringent customer KYC and anti-money laundering checks.
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CBN lifts ban of cryptocurrency
The CBN banned banks from crypto-related transactions in 2021, citing money laundering and terrorism financing concerns.
The regulator has now reversed that ban explaining that current trends globally have shown the need for crypto regulation instead of total ban, Punch reports.
The circular reads:
"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 a need to regulate the activities of virtual assets service providers (VASPs) which include 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 recognises VASPs as part of the definition of a financial institution.
“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 changes on cryptocurrency
Based on the new guidelines banks must obtain the bank verification number (BVN) of all directors and owners of crypto businesses that use their services.
The rules also mandate cryptocurrency companies to secure a license from the country’s capital markets regulator, the Securities Exchange Commission (SEC). E
Earlier in May 2022, the Security Exchange Commission issued rules on offering and collecting digital assets.
Per the SEC rules, virtual assets service providers (VASPs) such as crypto exchanges must have at least N500 million ($553,000) in capital and be registered with the CAC.
Expert speaks
Reacting to the development, Ola Atose, Koinkoin Chief Executive Officer explained that the decision by the CBN to regulate the cryptocurrency market is good news
"Now that we are free from all encumbrances, the CBN decision provides the pathway for crypto players like ourselves to continue what we have already been doing without worries about breaking the law.
"I have been advocating for regulation for some time, and I feel the CBN decision is a necessary first step. It will bolster the cryptocurrency market space in Nigeria, protect companies, eliminate bad actors, and reassure users.
"I am certain there will be growth, and I expect that in the future, with the CBN's increased knowledge about crypto players in Nigeria due to these new regulations, trust will be established. Perhaps, one day, banks will allow Nigerian traders to access digital assets through their apps."
Nigeria displaced as largest Bitcoin trading nation
Ealier Legit.ng reported that Nigeria has lost its position as a top crypto trading trading country in the world
The report shows that Brazil now ranks second on the list after El Salvador, with Nigeria trailing in the third place.
Brazil's crypto adoption is spurred by one of its biggest banks announcing the acceptance of Bitcoin.
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Source: Legit.ng
