The Central Bank of Nigeria (CBN) has issued instructions for banks regarding digital assets, indicating an easing of the nation’s regulators’ strict position on cryptocurrencies.
The rules shed further light on the authorities’ decision to allow virtual asset service providers to register accounts last month. They were made public on the bank’s website on Tuesday. For the biggest economy in Africa, the regulations represent a reversal from the years-long prohibition that prevented financial institutions from providing services to cryptocurrency companies.
The CBN stated in a recent statement that “global trends have shown that there is a need to regulate the activities of virtual assets service providers, which include cryptocurrencies and crypto assets.”
The guidelines do not remove limitations on Nigerian banks’ ability to own or trade cryptocurrency on their own account. The regulations also prohibit taking money out of cryptocurrency accounts and using virtual asset-holding accounts to pay third-party checks.
Nigeria is pushing for more control over digital assets, which is in line with recent moves from other African countries that are neighbours and where cryptocurrencies are becoming more and more common as inflation hedges. Despite opposition from certain politicians, Botswana passed a law governing the digital assets sector in 2022. According to Bloomberg News, the Bank of Mauritius has been preparing to introduce a digital currency as a central bank.