JUST IN: CBN Revokes Ban On Cryptocurrency Transactions

JUST IN: CBN Revokes Ban On Cryptocurrency Transactions

The Central Bank of Nigeria (CBN) has reversed its previous stance on cryptocurrency transactions, urging banks to disregard the earlier ban. The circular, dated December 22, 2023, and signed by the Director of the Financial Policy and Regulation Department, Haruna Mustafa, highlights a shift in global trends, emphasizing the need for cryptocurrency regulation…CONTINUE READING

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The CBN’s February 2021 circular had restricted banks from engaging with cryptocurrency service providers due to concerns about money laundering, terrorism financing risks, and the absence of regulatory measures. However, recognizing the evolving landscape, the CBN now acknowledges the necessity of regulating virtual asset service providers (VASPs), which include cryptocurrencies and crypto assets.

The Financial Action Task Force (FATF) updated its Recommendation 15 in 2018, requiring the regulation of VASPs to prevent the misuse of virtual assets for illicit activities. The Money Laundering (Prevention and Prohibition) Act, 2022, also recognizes VASPs as part of the definition of a financial institution, further supporting the need for regulation.

Additionally, the Securities and Exchange Commission issued rules in May 2022 to provide a regulatory framework for the operations of digital assets and VASPs in Nigeria. The new CBN guideline supersedes previous ones from January 2017 and February 2021, emphasizing that banks and financial institutions remain prohibited from holding, trading, or transacting in virtual currencies on their own account.

While reiterating the prohibition on individual bank involvement with virtual currencies, the CBN instructs all financial institutions to promptly comply with the new guideline. This marks a significant shift in the CBN’s approach to cryptocurrency transactions, aligning with evolving global perspectives and regulatory frameworks.

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Source; Bushradiogist