Central Bank Of Nigeria Crypto Ban Now Removed

Key Points:

• The bank has lifted the Central Bank of Nigeria crypto ban, citing the need to regulate virtual asset service providers (VASPs).

• The decision comes with stringent regulations for crypto companies, including compliance with the Money Laundering Act of 2022 and guidelines from the Nigerian Securities Exchange Commission.

In a notable policy shift, the bank officially revoked the Central Bank of Nigeria crypto ban, as disclosed in a December 22, 2023, circular.

Read more: Nigeria Leads The World In Crypto Awareness: Unveiling Web3 Insights And Regional Contrasts

Nigeria Lifts the Central Bank of Nigeria Crypto Ban

The CBN cited Section 30 of the Money Laundering Act of 2022, recognizing crypto companies (referred to as Virtual Asset Service Providers or VASPs) as financial institutions. Another influential factor in lifting the Central Bank of Nigeria crypto ban was the guidelines set by the Nigerian Securities Exchange Commission (SEC) in 2022 for crypto companies operating in Nigeria.

To ensure compliance, crypto companies must submit a white paper to the SEC and await approval for token launches, with banks obligated to obtain the BVN of all directors and owners. The guidelines also introduce stringent KYC measures before a VASP can have an account with a bank.

While opening avenues for banking transactions with VASPs, the CBN maintains a strict stance against banks and financial institutions engaging in holding, trading, or transacting virtual currencies on their own accounts, emphasizing prudence in risk management. The CBN’s decision signifies Nigeria’s openness to the digital currency wave while exercising caution.

Under the new guidelines, financial institutions are prohibited from permitting any account for virtual/digital asset businesses unless explicitly designated for that purpose. Cash withdrawals are disallowed, and third-party cheques are restricted.

Virtual/digital asset transactions are limited to transfers to designated accounts, and withdrawals are permitted only through a Manager’s cheque, reflecting Nigeria’s commitment to responsible engagement with cryptocurrency activities.

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