Nigeria’s central bank has issued new guidelines for banks dealing with cryptocurrency accounts, signaling a shift in the country’s approach to digital assets. The guidelines, detailed on the central bank’s official website, impose strict rules on banks when it comes to dealing with cryptocurrencies. Banks are prohibited from holding or trading virtual assets on behalf of their clients, and only naira-based accounts are allowed with no provision for cash withdrawals.
The central bank’s decision reflects its recognition of the global trend of virtual asset service providers, including cryptocurrencies. The regulations also indicate that the central bank aims to create a more open environment for the digital currency market while maintaining strict control.
Nigeria has been a significant player in the global digital currency market, with a recent report showing a 9% year-over-year increase in crypto transactions in the country. This surge in crypto activity is attributed to Nigeria’s economic challenges, including the depreciation of the naira. Many Nigerians have turned to digital currencies like Bitcoin and stablecoins as a hedge against the volatile naira.
Stablecoins, which are digital tokens pegged to fiat currency, have gained popularity in Nigeria due to their stability and predictability. However, the rapid growth in digital currency adoption has not been without challenges. In October 2022, the Nigerian digital currency community faced a setback when a popular influencer rug-pulled a project called Stimmy Coin, a parody of the US stimulus checks.
In December, the Central Bank of Nigeria lifted restrictions on banks and financial institutions operating accounts for virtual asset service providers, signaling its intention to foster a regulated digital currency environment. However, the newly introduced guidelines impose limitations on where the rescinded prohibition can be utilized, dampening the excitement of the lifted ban.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Africa |
| Countries | 🇳🇬 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | Nigeria Central Bank, US stimulus checks, Central Bank of Nigeria, Chainalysis, Stimmy Coin |
| Currencies | Bitcoin, Stablecoin, US Dollar, Euro, nigerian naira |
| Securities | None |
