The Central Bank of Nigeria (CBN) has officially launched an Anti-Money Laundering, Counter-Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) Supervision Pilot for a select group of Virtual Asset Service Providers (VASPs), to strengthen the integrity of Nigeria’s banking industry by enhancing oversight of virtual asset-related activities.

This risk-based supervisory program is characterized by a strictly supervisory approach, with the CBN explicitly stating that “Participation in the Pilot is strictly supervisory and does not confer any regulatory status, approval, licensing right, or authorisation on participating entities.”

The pilot initiative aims to help the CBN develop a structured understanding of AML/CFT/CPF risks, business models, and operational practices within the virtual asset sector. During the pilot period, participating VASPs are required to submit monthly supervisory Key Performance Indicators (KPIs) using a prescribed CBN template, undergo deep-dive reviews covering governance, customer onboarding, sanctions screening, transaction monitoring, and cross-border activity, and demonstrate credible implementation plans for the FATF Travel Rule, which is a primary focus of the initiative.

The six key entities identified for this initial supervisory phase are: cNGN, Flutterwave, Juicyway, KoinKoin, KuCoin, and Paystack. The pilot signifies a shift toward regulatory collaboration rather than outright restriction, aiming to balance innovation with financial stability and compliance.

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Announced on March 31, 2026, it is supported by several legal frameworks, including the Money Laundering (Prevention and Prohibition) Act 2022 and the BOFIA 2020. To ensure privacy, all data submitted by participating VASPs is treated as confidential supervisory information and handled in accordance with the Nigeria Data Protection Act 2023.

This structured oversight is essential for safeguarding the stability and integrity of Nigeria’s financial system amid the expanding use of virtual assets. By transitioning to a risk-based model, the CBN aims to foster responsible innovation while preventing digital assets from becoming conduits for financial crime. The move is particularly urgent, as Nigerian lawmakers have recently warned of a surge in Point of Sale (POS) fraud and the proliferation of unlicensed cryptocurrency services. Implementing these supervisory standards, including global requirements like the FATF Travel Rule, is a critical step toward building trust and enhancing Nigeria’s competitiveness in the evolving digital economy.

This pilot marks the initial phase of a larger, phased implementation. Subsequent phases are already scheduled but are currently not accepting new expressions of interest.