By
Reuters
Nigeria's
central bank has lifted a ban on transacting in cryptocurrencies, while saying
global trends had shown a need to regulate such activities, the bank said in
its latest circular. The Central Bank of Nigeria (CBN) in Feb. 2021 barred
banks and financial institutions from dealing in or facilitating transactions
in crypto assets, citing money laundering and terrorism financing risks.
Subsequently
Nigeria's Securities and Exchange Commission (SEC) in May last year published regulations
for digital assets that signalled Africa's most populous country was trying to
find a middle ground between an outright ban on crypto assets and their
unregulated use. In a circular dated Dec. 22, the CBN said current trends
globally have shown there is a need to regulate the activities of virtual asset
service providers (VASPs), which include cryptocurrencies and crypto assets.
The
latest guidelines spell out how banks and financial institutions (FI) should
open accounts, provide designated settlement accounts and settlement services
and act as channels for forex inflows and trade for firms transacting in crypto
assets. VASPs would need to be licensed by the Nigerian SEC to engage in the
crypto business.
"From
the commencement of these Regulations, Fl shall not open or permit the
operation of any account by any person or entity to conduct the business of
virtual/digital assets unless that account is designated for that purpose and
opened in line with the requirement of these Guidelines," the CBN said
But
banks were still barred from trading, holding or transacting cryptocurrencies,
the CBN said. Nigeria's young, tech-savvy population has eagerly adopted
cryptocurrencies, for example using peer-to-peer trading offered by crypto
exchanges to avoid the financial sector.
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