Cryptocurrency Nigerian Bank of Banks, the Central Bank of Nigeria (CBN) has lifted banks on the popular digital currency, cryptocurrency, as it allows all its interested commercial banks to transact the digital currency.
The change in the CBN policy on Cryptocurrency was made known to the public on Friday, December 22, 2023, in a circular signed by CBN Director of Financial Policy and Regulation, Haruna Mustapha.
Recall that two years ago, the CBN placed a total restriction on transactions of cryptocurrency in Nigeria, even though it faced public rejection mostly from among the youthful population of the country.
Lifting the ban on cryptocurrency, the CBN has, however, placed a "comprehensive regulatory framework ok the transaction of cryptocurrency in its financial market to harness its potential while mitigating risks.
The full statement reads:
FPR/DIR/PUB/CIR/002/003
CIRCULAR TO ALL BANKS AND OTHER FINANCIAL INSTITUTIONS
GUIDELINES ON OPERATIONS OF BANK ACCOUNTS FOR VIRTUAL ASSETS SERVICE PROVIDERS (VASPs)
"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.
"Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution. In addition, the Securities and Exchange Commission (SEC) in May 2022 issued Rules on Issuance, Offering, and Custody of Digital Assets and VASPS to provide a regulatory framework for their operations in Nigeria.
"In view of the foregoing, the CBN hereby issues these Guidelines to provide guidance to financial institutions under its regulatory purview in respect of their banking relationship with VASPs in Nigeria.
"The Guidelines supersedes the CBN’s circulars 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. However, banks and other financial institutions are still prohibited from holding, trading, and/or transacting in virtual currencies on their own account.
"Accordingly, all banks and other financial institutions are hereby required to immediately comply with the provisions of the Guidelines.
HARUNA B. MUSTAFA
DIRECTOR, FINANCIAL POLICY AND REGULATION DEPARTMENT
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Category: World-News
Tag: CBN Lifts Ban on Cryptocurrency Allows Banks to Transact
Written by Author (author)
Published 12/23/2023 7:26:52 AM