The Central Bank of Nigeria (CBN) has lifted the ban on cryptocurrency transactions in the country, allowing Nigerian banks and financial institutions to resume operations with cryptocurrency service providers. The initial ban, imposed in February 2021, was due to concerns over money laundering and terrorism financing risks associated with crypto assets.
Under the new guidelines, financial institutions can now open accounts specifically designated for businesses dealing in virtual/digital assets. However, banks and financial institutions are still prohibited from trading, holding, or transacting in cryptocurrencies on their own accounts. Virtual Asset Service Providers (VASPs) involved in the crypto business must be licensed by the Nigerian Securities and Exchange Commission.
The lifting of the ban is expected to have a significant impact on Nigeria’s financial landscape, given the country’s young and tech-savvy population that has shown a keen interest in cryptocurrencies. According to Chainalysis, the volume of crypto transactions in Nigeria grew by 9% year-over-year to $56.7 billion between July 2022 and June 2023.
Nigeria’s decision aligns with global trends towards recognizing and regulating cryptocurrencies instead of outright banning them. The Securities and Exchange Commission in Nigeria issued rules in May 2022 to provide a regulatory framework for digital assets and VASPs. The CBN’s guidelines are in line with international recommendations, such as those from the Financial Action Task Force (FATF), to regulate the use of virtual assets.
This move represents a significant step in acknowledging and integrating cryptocurrencies into Nigeria’s financial system, striking a balance between innovation in digital assets and regulatory oversight to ensure security and compliance.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Africa |
| Countries | 🇳🇬 |
| Sentiment | positive |
| Relevance Score | 1 |
| People | None |
| Companies | Central Bank of Nigeria, Nigerian Securities and Exchange Commission, Financial Action Task Force |
| Currencies | None |
| Securities | None |
