The Nigerian Central Bank relaxes its restriction on cryptocurrency trading

 The Nigerian Central Bank relaxes its restriction on cryptocurrency trading

The Nigerian Central Bank relaxes its restriction on cryptocurrency trading

In its most recent circular, Nigeria's central bank removed its prohibition on cryptocurrency transactions, citing the need for global regulation.

In its most recent circular, Nigeria's central bank removed its prohibition on cryptocurrency transactions, citing the need for global regulation.

In its most recent circular, the central bank of Nigeria announced that it has removed the prohibition on cryptocurrency transactions, citing the necessity for regulation of these activities given worldwide trends.

Citing the dangers of money laundering and terrorist funding, the Central Bank of Nigeria (CBN) forbade banks and other financial institutions from engaging in or assisting with transactions involving cryptocurrency assets in February 2021.

This came after the Securities and Exchange Commission (SEC) of Nigeria published regulations pertaining to digital assets in May of last year, suggesting that the most populous nation in Africa was heading toward a medium ground between outright banning crypto assets and allowing their unrestricted usage. Looking for something.

The CBN said in a circular dated December 22 that there is a need to regulate the operations of Virtual Asset Service Providers (VASPs), which deal with cryptocurrencies and crypto assets, according to current global trends.

The most recent recommendations outline how banks and other financial institutions (FIs) should create accounts, provide services related to designated settlement accounts and settlements, and serve as conduits for trade and foreign exchange for businesses that deal in cryptocurrency assets. Required

For VASPs to do cryptocurrency operations, they must receive a license from the Nigerian SEC.

As per the CBN, "FL shall not open or permit the operation of a single account by any person or entity for transacting business in virtual/digital assets, alongside effect from the commencement of these Rules and regulations, unless the account has been reserved for that purpose and has not been opened in conformity with the requirements of these guidelines."

However, according to the CBN, banks are still not allowed to possess, trade, or interact in cryptocurrencies.

Nigeria's youthful, tech-savvy populace has embraced cryptocurrencies with gusto, using peer-to-peer trading provided by crypto exchanges to circumvent the banking industry, for instance.

According to a September analysis by the New York-based blockchain research company Chainalysis, the number of cryptocurrency transactions in Nigeria increased by 9% annually to $56.7 billion between July 2022 and June 2023.