Nigeria’s central bank lifts crypto ban, introduces new regulations

The Central Financial institution of Nigeria has lifted its ban on cryptocurrency transactions, acknowledging the worldwide development in direction of regulating digital belongings, in keeping with a current Reuters report. This transfer marks a departure from the financial institution’s February 2021 determination, which prohibited banks and monetary establishments from participating in crypto-related actions because of considerations over cash laundering and terrorism financing.

The change in stance aligns with the Nigerian Securities and Trade Fee’s efforts to determine a regulatory framework for digital belongings. In Might final 12 months, the SEC launched rules for digital belongings, signaling Nigeria’s intent to steadiness between an outright crypto ban and unregulated utilization.

Below the brand new tips issued on Dec. 22, banks and monetary establishments are required to open designated accounts and supply settlement providers for firms dealing in cryptocurrencies and crypto belongings. Nonetheless, these establishments are nonetheless prohibited from instantly buying and selling, holding, or transacting in cryptocurrencies.

To function within the crypto enterprise, Digital Asset Service Suppliers should get hold of a license from the Nigerian SEC. The CBN’s round specifies that monetary establishments should not open or function any accounts for entities engaged in digital/digital belongings with out correct designation and adherence to the brand new tips.

This coverage reversal comes amid Nigeria’s rising cryptocurrency market, pushed by a younger and tech-savvy inhabitants. Regardless of regulatory hurdles, Nigerians have more and more turned to peer-to-peer crypto buying and selling to bypass monetary sector restrictions. In keeping with a report by Chainalysis, Nigeria’s crypto transaction quantity surged by 9% year-over-year, reaching $56.7 billion between July 2022 and June 2023.

Maxwell William

Maxwell William, a seasoned crypto journalist and content material strategist, has notably contributed to industry-leading platforms equivalent to Cointelegraph, OKX Insights, and Decrypt, weaving complicated crypto narratives into insightful articles that resonate with a broad readership.