Nigerian Government Okays Crypto transactions using Nigerian Bank accounts.
The Central Bank of Nigeria has reversed its stance on crypto assets, instructing banks to disregard the previous ban on crypto transactions.
In a circular dated December 22, 2023, signed by Haruna Mustafa, the Director of the Financial Policy and Regulation Department, the apex bank acknowledges the global trend towards regulating virtual assets service providers (VASPs), including cryptocurrencies.
The circular highlights the need for such regulation in response to money laundering, terrorism financing risks, and the absence of adequate regulations and consumer protection measures.
The CBN points to international developments, such as the Financial Action Task Force's updated Recommendation 15 in 2018, which mandates the regulation of VASPs to prevent misuse of virtual assets.
Locally, the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution. Additionally, the Securities and Exchange Commission's issuance of rules in May 2022 further establishes a regulatory framework for the operations of virtual assets service providers in Nigeria.
In light of these considerations, the CBN issues new guidelines to provide direction to financial institutions regarding their banking relationships with VASPs in Nigeria.
This directive has put Nigeria on the map as one countries looking into adoption of blockchain and Crypto.
