The Central Bank of Nigeria, CBN, has changed its position on crypto assets in the country and asked banks to ignore its earlier ban on crypto transactions.
This is contained in a circular dated December 22, 2023, with reference number FPR/DIR/PUB/CIR/002/003, and signed by the apex bank’s Director, Financial Policy and Regulation Department, Haruna Mustafa.
The circular is titled ‘Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS).’
CBN stated that current global trends have shown the need for crypto regulation.
It said, “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 a need to regulate the activities of virtual assets service providers (VASPs) which include 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.”
The apex bank pointed out that the new guideline surpassed its old ones referenced FPR/DIR/GEN/CIR/06/010 of January 12, 2017, and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 on the subject.
It also confirmed that banks and other financial institutions were still prohibited from holding, trading and/or transacting in virtual currencies on their own account, adding that all banks and other financial institutions were required to quickly comply with the new guideline.
Recall that in its circular with reference number BSD/DIR/PUB/LAB/014/001, dated February 5, 2021, the CBN reminded banks that dealing in crypto currencies or facilitating payments for cryptocurrency exchanges were prohibited.