The Central Bank of Nigeria has lifted a two-year ban on cryptocurrency transactions in tandem with stricter client KYC and anti-money laundering measures.
For the industry, which has been yearning for regulatory clarity and legitimacy in Nigeria, the CBN’s decision to let lenders work with cryptocurrency firms is a major achievement. Following years of scrutiny from authorities, the move is anticipated to provide the industry with more regulatory legitimacy and clarity.
For Nigerians, cryptocurrencies provide several advantages, including quick and safe transactions, lower fees, and more financial inclusion.
In 2021, the CBN forbade banks from engaging in any cryptocurrency-related transactions, citing worries about money laundering and financing of terrorism.
Following the release of new guidelines for cryptocurrency transactions to financial institutions, the regulator has officially lifted the restriction and adopted a more constructive stance toward digital currency assets.
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Banks are required to get the bank verification number (BVN) of all directors and owners of cryptocurrency enterprises that utilize their services, according to new guidelines that were announced on Friday.
The regulations also require cryptocurrency enterprises to obtain a license from the Securities Exchange Commission (SEC), the nation’s capital markets regulator. The Securities Exchange Commission published guidelines for offering and acquiring digital assets earlier in May 2022.
Virtual asset service providers (VASPs), like cryptocurrency exchanges, are required by SEC regulations to register with the CAC and maintain a minimum capital of ₦500 million ($553,000).
The latest guidelines from the CBN still prohibit banks from storing, trading, or conducting business with virtual currencies on their accounts. According to experts, it makes perfect sense to implement checks across the board to protect consumer cash because of the volatility of cryptocurrency assets. The country’s top bank declared that its new regulations for regulating the usage of cryptocurrencies comply with international standards.
