The Central Bank of Nigeria (CBN) has decided to lift its ban on cryptocurrency transactions, News About Nigeria reports.
The reversal of the directive was communicated through a circular dated December 22, 2023, signed by Haruna Mustafa, Director of the CBN’s Financial Policy and Regulation Department.
The circular, titled ‘Circular to All Banks and Other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS)’, acknowledges the global trend favouring the regulation of virtual assets.
It highlights the need to regulate activities involving cryptocurrencies and crypto assets.
The CBN said it recognises global trends emphasising the regulation of virtual assets, citing recommendations from the Financial Action Task Force (FATF).
The statement read in part; “However, current trends globally have shown that there is a need to regulate the activities of virtual assets service providers (VASPs) which include cryptocurrencies and crypto assets.
“Following this development, the Financial Action Task Force (FATF) in 2018 also updated its Recommendation 15 to require VASPS to be regulated to prevent misuse of virtual assets for ML/TF/PF.
“Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognises VASPs as part of the definition of a financial institution.”
While lifting the ban on crypto transactions, the CBN maintains the prohibition on banks holding, trading, and/or transacting in virtual currencies on their own account.
Banks and financial institutions are instructed to comply immediately with the new guideline.
The CBN’s earlier directive, issued on February 5, 2021, prohibited banks from engaging in cryptocurrency transactions and facilitating payments for crypto exchanges.
