The guidelines are intended to establish minimum requirements and standards for banking relationships and account openings for Nigerian virtual asset service providers.
The Central Bank of Nigeria (CBN) has loosened restrictions on Nigerian banks facilitating cryptocurrency transactions, almost two years after enforcing a broad ban on banks dealing with digital currencies.
The CBN acknowledged in a circular distributed to banks on December 22 that the strict regulations placed on financial institutions in 2021 are no longer warranted given the growing demand and adoption of cryptocurrencies worldwide.
The statement noted:
“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.”
The guidelines are intended to set minimum requirements and standards for virtual asset service providers (VASPs) in Nigeria when it comes to opening accounts and forming banking relationships.
The guidelines also seek to guarantee strong risk management procedures in the banking sector with regard to the operations of authorised VASPs.
The statement does stress that financial institutions are still not allowed to use their own accounts to hold, trade, or transact in cryptocurrencies.
According to reports in February 2021, all regulated financial institutions in Nigeria were prohibited from providing services to cryptocurrency exchanges operating within the nation by the Central Bank of Nigeria.
According to recent reports, the Nigerian federal government has been urged by the local blockchain industry to enact regulations that will facilitate the national adoption of the approved blockchain policy.
The president of the Stakeholders in Blockchain Association of Nigeria (SiBAN), Obinna Iwuno, recently emphasised how important it is to set up a legal framework in order to hasten the adoption of blockchain technology across various economic sectors.
According to Iwuno, Nigeria is prepared to use blockchain technology:
“We are ready for full adoption now, and the blockchain policy initiated by the government positions Nigeria as a trailblazer in the continent’s digital economy landscape if fully implemented”