Nigerian Central Bank Reverses Ban on Crypto Entities
The Central Bank of Nigeria (CBN) has reversed its previous order that prohibited banks from providing services to crypto entities. The decision aligns with the updated recommendation 15 from the Financial Action Task Force (FATF), which calls for the regulation of virtual asset service providers.
New Guidelines for Virtual Asset Service Providers
In its newly issued guidelines, the CBN stated that it has rescinded the previous prohibition order and the regulation now supersedes the 2017 prohibition. The central bank’s previous order resulted in the closure of several bank accounts linked to crypto.
CBN Aligned with Global Trends
The CBN explained that the decision to abandon the prohibition order aligns Nigeria’s regulations with global trends. The update to the FATF’s recommendation 15 played a significant role in the central bank’s revised stance. It recognizes the need to regulate virtual asset service providers to prevent the misuse of virtual assets for money laundering, terrorism financing, and proliferation financing.
New Guidelines for Banks and Financial Institutions
The CBN’s circular to banks and financial institutions stated that they are still prohibited from holding, trading, or transacting in virtual currency. However, these entities are expected to comply immediately with the new guidelines.
Hot Take: Clearer Regulations for Crypto in Nigeria
The reversal of the Nigerian central bank’s ban on crypto entities is a positive development for the cryptocurrency industry in the country. By aligning with global trends and recognizing the need for regulation, Nigeria is taking steps to create a clearer framework for virtual asset service providers. While banks and financial institutions are still restricted from dealing with virtual currency, this move indicates a shift in the country’s approach to cryptocurrencies and could lead to greater adoption and innovation in the Nigerian crypto space.
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