The CBN finally lift the ban on bank transactions involving cryptocurrencies.
The announcement of the reversal of the crypto policy was made in a circular signed by
The letter, which was titled “Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS),” stated that the nation’s top bank has reversed its previous position on cryptocurrency assets.
According to the CBN, the move is in keeping with the need to adapt to contemporary global trends, which indicated the necessity for cryptocurrency regulation.
According to the statement, “The CBN, in February 2021, issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers due to the risks and vulnerabilities associated with money laundering and terrorism financing (ML/TF) as well as the lack of regulations and consumer protection measures inherent in their operations.”
Global trends, however, have demonstrated the necessity of regulating the operations of virtual asset service providers (VASPs), which offer cryptocurrency and other digital assets. In response to this advancement, the Financial Action Task Force (FATF) revised Recommendation 15 in 2018 to mandate the regulation of VASPS in order to stop the improper use of virtual assets for ML/TF/PF.
Moreover, VASPs are acknowledged as a component of the Money Laundering (Prevention and Prohibition) Act, 2022, Section 30 acknowledges VASPs as a component of the financial institution concept.
Furthermore, in order to establish a legal framework for their activities in Nigeria, the Securities and Exchange Commission published Rules on Issuance, Offering, and Custody of Digital Assets and VASPs in May 2022.
The CBN hereby releases this guideline to give financial institutions under its regulatory scope guidance regarding their banking connection with VASPs in Nigeria in light of the aforementioned.
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In its statement, the CBN stated that the most recent guidelines supersede the previous ones, citing FPR/DIR/GEN/CIR/06/010 dated January 12, 2017, and BSD/DIR/PUB/LAB/014/001 dated February 5, 2021.
It further confirmed that the keeping, trading, and/or transaction of virtual currencies on an account is still forbidden for banks and other financial organizations.
Furthermore, the apex bank declared that all banks and other financial organizations must adhere to its new regulations right away.
Remember that in 2021, Godwin Emefiele, the former governor of the Central Bank of Nigeria, forbade banks from handling cryptocurrency transactions or processing payments for cryptocurrency exchanges operating in Nigeria.
It required banks at the time to identify individuals or organizations using their systems to engage in cryptocurrency exchanges and to make sure those accounts were canceled.