The Central Bank of Nigeria (CBN) revised restrictions on banks facilitating crypto transactions. The news comes after the country’s apex bank introduced a comprehensive ban on banks engaging with crypto.
According to reports by Bloomberg, citing news from BusinessDay, after nearly two years of a comprehensive ban on banks’ involvement with digital currencies, the Nigerian central bank relaxed restrictions allowing crypto firms to open accounts with Nigerian banks.
One of The Highest Rates of Crypto Adoption
Nigeria is one of the world’s leading countries in crypto adoption, forcing the Central Bank of Nigeria to revise its stance toward digital assets. The increased global demand and higher crypto adoption rates made the CBN address the stringent restrictions it imposed in 2021. In its 2021 restrictions, the CBN ordered deposit-taking financial institutions to close accounts transacting in or operating crypto exchanges. According to the bank, such deals were “prohibited.”
In a statement issued to banks on December 22, the CBN explained:
“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.”
Tech journalist Abubakar posted the circular to X (formerly Twitter).
In its circular, the CBN said it aims to introduce minimum standards and requirements for establishing banking relationships and opening accounts for virtual asset service providers in the country. The CBN further explained its guidelines, which aim to present a strict risk management framework for the banking industry involved in the activities of licensed VASPs. The bank, however, maintains that financial institutions are forbidden to hold, trade, or conduct crypto transactions using their own accounts.
Nigeria to Introduce Legislation Recognising Bitcoin (BTC) and Other Crypto
In December 2022, it was reported that Nigeria would soon pass a law legalising the use of bitcoin and other crypto. If the law is passed, it will address the country’s growing Bitcoin usage and will be a major catalyst for the country. Despite the 2021 ban, Bitcoin maintains a strong presence in Nigeria.
With its 2021 crypto ban, Nigeria introduced a central bank digital currency (CBDC) called the eNaira. At the time, the CBN said the eNaira would be introduced to complement the physical Naira instead of replacing it.
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