CBN Relaxes Restrictions on Cryptocurrency Transactions

9 views 12:55 pm 0 Comments December 24, 2023

The Central Bank of Nigeria (CBN) has relaxed restrictions on transactions on crypt-currencies in the country.

The apex bank disclosed this in a circular dated December 22, 2023, signed by the Director, Financial Policy and Regulation Department, Haruna Mustafa.

The document titled, ‘Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS),’ was addressed to the banks.

It noted that its decision was informed by current trends globally which showed the need for crypto-regulation.

“The CBN in February 2021 issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers in view of the money laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent in their operations as well as the absence of regulations and consumer protection measures.

“However, current trends globally have shown that there is need to regulate the include providers (V/ASPs) which activities of virtual assets service cryptocurrencies and crypto assets. Following this development, the Financial Action Task Force (FATF) in 2018 also updated its Recommendation 15 to require VASPs to be regulated to prevent misuse of virtual assets for ML/TF/PF Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution.

“In addition, the Securities and Exchange Commission in May 2022, issued Rules on Issuance, Offering and Custody of Digital Assets and VASPs to provide a regulatory framework for their operations in Nigeria.

“In view of the foregoing, the CBN hereby issues this guideline to provide guidance to financial institutions under its regulatory purview in respect of their banking relationship with VASPs in Nigeria,“ it added.

The apex bank noted that the new guidelines supersede it’s previous one with reference number FPR/DIR/GEN/CIR/06/010 of January 12, 2017, and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 on the subject.