The Central Financial institution of Nigeria has lifted its ban on cryptocurrency transactions, acknowledging the worldwide development in the direction of regulating digital property, in line with a latest Reuters report. This transfer marks a departure from the financial institution’s February 2021 resolution, which prohibited banks and monetary establishments from partaking in crypto-related actions attributable to considerations over cash laundering and terrorism financing.
The change in stance aligns with the Nigerian Securities and Trade Fee’s efforts to ascertain a regulatory framework for digital property. In Could final 12 months, the SEC launched laws for digital property, signaling Nigeria’s intent to steadiness between an outright crypto ban and unregulated utilization.
Underneath the brand new pointers issued on Dec. 22, banks and monetary establishments are required to open designated accounts and supply settlement providers for companies dealing in cryptocurrencies and crypto property. Nevertheless, these establishments are nonetheless prohibited from instantly buying and selling, holding, or transacting in cryptocurrencies.
To function within the crypto enterprise, Digital Asset Service Suppliers should receive a license from the Nigerian SEC. The CBN’s round specifies that monetary establishments should not open or function any accounts for entities engaged in digital/digital property with out correct designation and adherence to the brand new pointers.
This coverage reversal comes amid Nigeria’s rising cryptocurrency market, pushed by a younger and tech-savvy inhabitants. Regardless of regulatory hurdles, Nigerians have more and more turned to peer-to-peer crypto buying and selling to bypass monetary sector restrictions. In response to a report by Chainalysis, Nigeria’s crypto transaction quantity surged by 9% year-over-year, reaching $56.7 billion between July 2022 and June 2023.
