Nigeria Lifts Ban On Cryptocurrency Transactions – The Street Journal

The Central Bank of Nigeria (CBN) has lifted the restriction on crypto assets and urged banks to ignore the initial ban on cryptocurrency transactions. Haruna Mustafa, director of the CBN's Department of Financial Policy and Regulation, said in a circular that current trends globally have demonstrated 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 money laundering and terrorist financing (ML/FT) risks and vulnerabilities. ) inherent to its operations, as well as the absence of regulations and consumer protection measures,” Mustafa said. “However, current global trends have shown that there is a need to regulate the activities of virtual asset service providers (VASPs), which include cryptocurrencies and cryptoassets. Following this development, the Financial Action Task Force (FATF) also updated its Recommendation 15 in 2018 to require VASPS to be regulated to prevent the misuse of virtual assets for ML/FT/PF. “Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution.” It noted that in May 2022, the Securities and Exchange Commission issued Rules on the Issuance, Offering and Custody of Digital Assets and VASPs to provide a regulatory framework for its operations in Nigeria. “In view of the above, the CBN is issuing this guideline to provide guidance to financial institutions under its regulatory ambit with respect to their banking relationship with VASPs in Nigeria,” Mustafa said. The CBN director said that the new guideline replaces the old referenced FPR/DIR/GEN/CIR/06/010 of January 12, 2017 and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 that imposed a restriction. on cryptocurrency transactions under the previous government of President Muhammadu Buhari and former CBN Governor Godwin Emefiele. Mustafa, however, stated that banks and other financial institutions are still prohibited from holding, trading and/or transacting virtual currencies on their own account. He noted that all banks and other financial institutions must immediately comply with his new guideline.

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