Nigeria’s Central Bank (CBN) has set new banking standards, reshaping the crypto landscape. This follows their decision to lift a ban on banks dealing with crypto entities.
Hence, the CBN now mandates rigorous guidelines for banks handling accounts of Virtual Asset Service Providers (VASPs).
Stringent Measures for Enhanced Safety
The guidelines, revealed last Tuesday, mark a shift from the bank’s 2021 stance. Previously, Nigeria’s central bank had directed financial institutions to shut down accounts linked to cryptocurrency, citing risks such as money laundering.
However, global trends have steered the CBN towards a more regulated approach. Consequently, the new framework allows only naira-based accounts with a strict no-cash withdrawal policy. Moreover, these accounts won’t clear third-party cheques, limiting withdrawals to twice per quarter.
These developments come as Nigeria grapples with the growing presence of virtual assets. Besides setting transactional boundaries, the guidelines specify the process and documentation required to open crypto-focused bank accounts.
Additionally, the CBN maintains its ban on financial institutions holding or trading crypto in their accounts.
The move reflects Nigeria’s evolving stance on digital assets, balancing innovation with regulatory oversight. Hence, it promises to enhance consumer protection while acknowledging the growing relevance of cryptocurrencies in the global financial landscape.