- The Central Bank of Nigeria has finally lifted the ban on cryptocurrency transactions in the Nigerian financial system
- Apexback also introduced new guidelines for financial institutions regarding cryptocurrency transactions.
- Popular cryptocurrencies in Nigeria include Bitcoin, Ethereum, Doge Coin as well as Dash and Ripple.
Dave Ibemer, a forensic journalist, has more than a decade of experience covering technology, energy, stocks, investing, and economics.
The Central Bank of Nigeria has lifted restrictions on cryptocurrency transactions at commercial banks.
This is in accordance with the circular dated December 22, 2023, No. FPR/DIR/PUB/CIR/002/003 and signed by Haruna Mustafa, Director of the Financial and Regulatory Policy Department at Apex Bank.
The statement is titled “Guidance for All Banks and Other Financial Institutions on Managing Bank Accounts for Virtual Asset Service Providers (VASPS).” It also introduced stringent Know Your Customer (KYC) checks for customers and anti-money laundering measures.
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CBN lifts ban on cryptocurrencies
The Central Bank of Nigeria has banned banks from conducting cryptocurrency-related transactions in 2021, citing money laundering and terrorist financing.
The regulator has now lifted the ban, stating that current global trends point to the need for regulation of cryptocurrencies rather than a complete ban, Punch reports.
The circular states:
“In February 2021, the National Central Bank issued a circular prohibiting banks and other financial institutions from managing transaction accounts for cryptocurrency providers, taking into account the inherent risks of money laundering and terrorist financing (ML/TF), as well as the weakness of their operations. Operations, lack of systems and efforts related to consumer protection.
“However, current global trends point to the need to regulate Virtual Asset Service Providers (VASPs) covering cryptocurrencies and crypto assets. Subsequently, in 2018, the Financial Action Task Force (FATF) also updated Recommendation No. 15, requiring VASPS rules to prevent the misuse of virtual assets for the purposes of money laundering, terrorist financing and terrorist financing.
“In addition, Section 30 of the Money Laundering Prevention and Prohibition Act 2022 recognizes asset service provider as part of the definition of financial institutions.
“Furthermore, in May 2022, the SEC published the Digital Asset Issuance, VASP, Offering and Custody Regulations to provide a regulatory framework for its operations in Nigeria.
“In light of the above, the Central Bank of Nigeria issues these guidelines to provide financial institutions with guidance within their regulations with respect to their banking relationships with asset service providers in Nigeria.”
CBN turns into cryptocurrency
According to the new rules, banks must obtain bank verification numbers (BVN) from all managers and owners of cryptocurrency companies who use their services.
The rules also require cryptocurrency companies to obtain a license from the country's capital market regulator, the Securities and Exchange Commission (SEC). And
Previously, in May 2022, the SEC issued rules regarding the offering and exchange of digital assets.
According to SEC rules, virtual asset service providers (VASPs), such as cryptocurrency exchanges, must have a capital of at least 500 million naira ($553,000) and be registered with the CAC.
Nigeria loses its position as the largest Bitcoin trading country
Ealier Legit.ng reports that Nigeria has lost its position as the leading cryptocurrency trading country in the world
The report shows that Brazil now ranks second on the list, behind El Salvador, and Nigeria is in third place.
The spread of cryptocurrency in Brazil was boosted by the announcement of one of the largest Brazilian banks to accept Bitcoin.
Source: Legit.ng