Nigeria’s central bank lifts crypto ban, introduces new regulations

The Central Financial institution of Nigeria has lifted its ban on cryptocurrency transactions, acknowledging the worldwide pattern in the direction of regulating digital property, in response to a current Reuters report. This transfer marks a departure from the financial institution’s February 2021 choice, which prohibited banks and monetary establishments from partaking in crypto-related actions resulting from issues over cash laundering and terrorism financing.

The change in stance aligns with the Nigerian Securities and Alternate Fee’s efforts to determine a regulatory framework for digital property. In Might final yr, the SEC launched laws for digital property, signaling Nigeria’s intent to steadiness between an outright crypto ban and unregulated utilization.

Beneath the brand new pointers issued on Dec. 22, banks and monetary establishments are required to open designated accounts and supply settlement providers for firms dealing in cryptocurrencies and crypto property. Nonetheless, these establishments are nonetheless prohibited from immediately buying and selling, holding, or transacting in cryptocurrencies.

To function within the crypto enterprise, Digital Asset Service Suppliers should get hold of 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 keeping with 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.