Nigeria Lifts Restrictions on Banks’ Facilitating Crypto Transactions. After almost two years of enforcing a blanket prohibition on banks working with digital currencies, the Central Bank of Nigeria (CBN) has relaxed the restrictions placed on Nigerian banks assisting with cryptocurrency transactions.
Furthermore, in a circular sent out to banks on December 22nd, the Central Bank of Nigeria (CBN) stated that the draconian limitations imposed on financial institutions in 2021 are no longer viable due to the growing demand and usage of cryptocurrency worldwide.
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These regulations establish the fundamental guidelines that virtual asset service providers (VASPs) in Nigeria must adhere to when interacting with financial institutions and setting accounts.
The statement noted:
On the other hand, recent developments on a worldwide scale have demonstrated that there is a requirement for the operations of virtual assets service providers (VASPs), which encompass cryptocurrencies and crypto assets.
To add insult to injury, the laws attempt to ensure that the operations of licensed VASPs are subject to stringent risk management procedures in the banking sector. According to the statement, it is still against the law for traditional financial institutions such as banks and other financial institutions to use their accounts to store, sell, or deal in cryptocurrencies.
Reportedly, the Central Bank of Nigeria prohibited all recognized financial institutions in Nigeria from providing services to cryptocurrency exchanges in February 2021. The federal government imposed this prohibition.
Nigeria’s blockchain industry has formally requested the federal government set guidelines to support the widespread implementation of the country’s recently established blockchain policy. This is one of the other recent developments.
In addition, according to Obinna Iwuno, president of the Stakeholders in Blockchain Association of Nigeria (SiBAN), there is an immediate requirement for a regulatory framework to hasten the incorporation of blockchain technology into several different economic sectors.