The Central Bank of Nigeria has lifted the almost 2 years ban on cryptocurrency related transactions using official bank means.
The CBN announced the reversal of the policy in a circular by Haruna Mustapha, its director in charge of financial policy and regulation.
The Director said the central bank would now provide regulations for financial institutions on how to manage cryptocurrency to avoid misuse.
You can recall that the CBN issued a circular in February 2021 restricting banks and other financial institutions from operating accounts for cryptocurrency service providers.
The then CBN governor Mr Godwin Emefiele had announced that the restriction was necessary in view of the money laundering and terrorism financing risks posed by cryptocurrency.
Mr Emefiele also said the vulnerability inherent in cryptocurrency operations, as well as the absence of regulation and consumer protection measures were also responsible for the policy.
However, according to Mr Mustapha, current global trends have shown that there is need to regulate the activities of Virtual Assets Service Providers (VASPs) which include cryptocurrencies and crypto assets.
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Following this development, the Financial Action Task Force (FATF) also updated its recommendation to require VASPs to be regulated, to prevent misuse of virtual assets.
“In view of the foregoing, the CBN hereby issues this guidelines to provide guidiance to financial institutions under its regulatory purview in respect of their relationship with VASPs in Nigeria.
“The guidelines supersedes the CBN circular of Feb. 5, 2021on the subject,” the director said
This new lift doesn’t give banks the right to trade hoard or facilitate cryptocurrency transactions on their own account.
