Central Bank Of Nigeria Introduces Crypto Friendly Policies

The Central Bank of Nigeria (CBN) has reportedly loosened its rules for banks facilitating crypto transactions. The new guidelines are designed to establish minimal standards and criteria for virtual asset service providers (VASPs) concerning banking relationships and the initiation of accounts in Nigeria.

Growing demand forces change in Nigeria

In a communication distributed to banks on December 22nd, the CBN acknowledged that the growing global demand and acceptance of crypto make it unreasonable to uphold the strict limitations imposed on financial institutions in 2021. The announcement highlighted that current trends globally have shown that there is a need to regulate the activities of VASPs which include cryptocurrencies and digital assets.

As such, the aforementioned guidelines aim to set forth minimum standards and prerequisites for establishing banking relationships and initiating accounts for VASPs in Nigeria. Furthermore, the new rules strive to guarantee robust risk management practices within the banking industry concerning the operations of licensed VASPs. However, financial institutions are still forbidden to possess, trade, or execute transactions in crypto using their own accounts.

Nigeria could become a financial powerhouse

Back in February 2021, the CBN imposed a ban on all regulated financial institutions when it came to providing services to crypto exchanges in the country. In more recent developments, the local blockchain industry has urged the federal government of Nigeria to implement regulations that would facilitate the widespread integration of the approved blockchain policy in the nation.

Obinna Iwuno, the President of the Stakeholders in Blockchain Association of Nigeria (SiBAN), emphasized the imperative need to establish a regulatory framework to expedite the infusion of blockchain technology into various sectors of the economy. Iwuno conveyed that Nigeria is fully prepared for complete adoption now, and the blockchain policy initiated by the government positions Nigeria as a pioneer in the African digital economy landscape if fully executed.