The Central Financial institution of Nigeria has lifted its ban on cryptocurrency transactions, acknowledging the worldwide development in the direction of regulating digital belongings, in keeping with a latest Reuters report. This transfer marks a departure from the financial institution’s February 2021 choice, which prohibited banks and monetary establishments from participating in crypto-related actions as a result of issues 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 belongings. In Could final yr, the SEC launched laws for digital belongings, signaling Nigeria’s intent to steadiness between an outright crypto ban and unregulated utilization.
Below the brand new tips issued on Dec. 22, banks and monetary establishments are required to open designated accounts and supply settlement providers for corporations dealing in cryptocurrencies and crypto belongings. Nevertheless, these establishments are nonetheless prohibited from straight buying and selling, holding, or transacting in cryptocurrencies.
To function within the crypto enterprise, Digital Asset Service Suppliers should acquire 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 belongings with out correct designation and adherence to the brand new tips.
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.
