The Central Bank of Nigeria (CBN) has lifted its controversial ban on cryptocurrency transactions in the country.
The ban, instituted in February 2021, had barred Nigerian banks and financial institutions from facilitating crypto trading and had forced many crypto businesses to relocate or close down entirely.
According to a circular issued by the CBN on December 22, 2023, banks can now open accounts for and provide forex services to registered Virtual Asset Service Providers (VASPs).
This brings Nigeria’s regulations in line with global anti-money laundering standards that require the formal regulation of crypto entities.
The CBN had previously cited concerns over the potential for crypto’s use in money laundering and terror financing as reasons for the ban. However, despite the restrictions, Nigeria saw a 9% annual increase in crypto transaction volumes totaling $56.7 billion from mid-2022 to mid-2023 per Chainalysis.
Crypto enthusiasts in Nigeria have welcomed the lifting of restrictions, which will allow them to seamlessly make crypto transactions via their bank accounts. The new rules follow updated crypto regulations issued by Nigeria’s Securities and Exchange Commission in May 2022.
However, banks still cannot trade or transact in crypto assets themselves. The CBN maintains that compliance with the new guidelines is mandatory.
The easing of the ban marks a positive shift for Africa’s largest economy, signalling an increasing openness to emerging digital technologies.