Nigeria’s Central Bank Fleshes Out New Rule Allowing Crypto Firms’ Access to Bank Accounts

CoinDeskPolicyPublished on 2024-01-03Last updated on 2024-01-04

Abstract

Nigerian banks are still restricted from holding or trading crypto on their own behalf, despite regulators’ softening stance toward digital assets.

The Central Bank of Nigeria (CBN) has released guidelines for banks on digital assets, a sign the country's regulators are softening their stringent stance on crypto.

The guidelines, publicized Tuesday on the bank's website, provide greater details on the regulators’ decision to open accounts for virtual asset service providers last month. The rules are an about-face for Africa's largest economy, where a years-long ban once barred financial institutions from servicing crypto firms.

“Current trends globally have shown that there is a need to regulate the activities of virtual assets service providers which include cryptocurrencies and crypto assets,” the CBN said Tuesday in a statement.

The guidance does not lift restrictions on the holding or trading of cryptocurrencies by Nigerian banks on their own behalf. Also under the rules, cash withdrawals from crypto accounts and clearing third-party checks through virtual asset-holding accounts are forbidden.

Nigeria’s push to increase oversight of digital assets aligns with recent initiatives from neighboring African nations, where cryptocurrencies have become increasingly popular as hedges against inflation. In 2022, Botswana passed a law regulating the digital assets sector despite opposition from some lawmakers in the country. Meanwhile, the Bank of Mauritius has been planning to launch a central bank digital currency, Bloomberg News reported.

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Edited by Sheldon Reback.

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