The Central Bank of Nigeria has lifted its ban on cryptocurrency transactions, acknowledging the worldwide development in direction of regulating digital property, in line with a current Reuters report. This transfer marks a departure from the bank’s February 2021 determination, which prohibited banks and monetary establishments from participating in crypto-related actions because of issues over cash laundering and terrorism financing.
The change in stance aligns with the Nigerian Securities and Exchange Commission’s efforts to ascertain a regulatory framework for digital property. In May final yr, the SEC launched regulations for digital property, signaling Nigeria’s intent to steadiness between an outright crypto ban and unregulated utilization.
Under the new tips issued on Dec. 22, banks and monetary establishments are required to open designated accounts and supply settlement providers for companies dealing in cryptocurrencies and crypto property. However, these establishments are nonetheless prohibited from instantly buying and selling, holding, or transacting in cryptocurrencies.
To function within the crypto enterprise, Virtual Asset Service Providers should acquire a license from the Nigerian SEC. The CBN’s round specifies that monetary establishments should not open or function any accounts for entities engaged in digital/digital property with out correct designation and adherence to the new tips.
This coverage reversal comes amid Nigeria’s rising cryptocurrency market, pushed by a younger and tech-savvy inhabitants. Despite regulatory hurdles, Nigerians have more and more turned to peer-to-peer crypto buying and selling to bypass monetary sector restrictions. According to a report by Chainalysis, Nigeria’s crypto transaction quantity surged by 9% year-over-year, reaching $56.7 billion between July 2022 and June 2023.
