Nigerian Central Bank Releases Guidelines for Crypto Accounts
The Nigerian Central Bank (CBN) has issued strict guidelines for banks and financial institutions that wish to open crypto accounts. These guidelines were published following the lifting of the ban on banks operating accounts for virtual asset service providers (VASPs).
VASP Regulation is Essential
According to a report by Bloomberg, the CBN recently published the “Guidelines on Operations of Bank Accounts for Virtual Asset Service Providers” on its website. These guidelines emphasize the bank’s decision to allow banks to operate accounts for VASPs.
The CBN had previously imposed stringent restrictions in 2021 due to concerns about money laundering, terrorism financing, and the lack of regulation and consumer protection measures within the crypto industry. However, the bank recognized the need to regulate the activities of VASPs, including cryptocurrencies and crypto assets.
Restrictions on Cash Withdrawals
Nigeria is known for its high crypto adoption rate, prompting the central bank to address the growing presence of virtual assets. The newly published guidelines state that only naira-based accounts will be allowed, and cash withdrawals are prohibited. Furthermore, clearing third-party cheques through crypto accounts is not permitted, and individuals are limited to two withdrawals per quarter.
The CBN also outlined the process for opening bank accounts for crypto-related activities and specified the required documents.
Cryptocurrency Transactions via Financial Institutions’ Accounts Banned
It is important to note that the CBN’s ban on financial institutions from holding, trading, or conducting crypto transactions using their own accounts remains in place.
Hot Take: Nigerian Central Bank Releases Guidelines for Crypto Accounts
The Nigerian Central Bank has taken a significant step towards regulating the country’s crypto industry by publishing guidelines for banks and financial institutions that want to open crypto accounts. These guidelines, released after the lifting of the ban on banks operating accounts for virtual asset service providers, aim to address concerns about money laundering, terrorism financing, and the lack of regulation within the crypto space. While Nigeria boasts a high rate of crypto adoption, the new guidelines impose restrictions on cash withdrawals and prohibit the clearing of third-party cheques through crypto accounts. It is clear that the CBN is determined to regulate the activities of virtual asset service providers and promote a safer environment for crypto transactions in Nigeria.
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