Nigeria lifts ban on crypto trading
The Central Bank of Nigeria (CBN) has lifted restrictions on crypto assets, urging banks to ignore the initial ban on crypto transactions.
The CBN, in a circular by Haruna Mustafa, Director-General of the Department of Financial Policy and Regulation, said current global trends demonstrate the need for virtual currency regulation.
“In February 2021, the CBN announced that banks and other financial institutions will not be able to use virtual currency in view of the money laundering and terrorist financing (ML/TF) risks and vulnerabilities inherent in their operations, as well as the absence of financial institutions. We have issued a circular restricting service providers from operating accounts. It is a regulatory and consumer protection measure,” Mustafa said.
“However, current global trends indicate that the activities of virtual asset service providers (VASPs), including cryptocurrencies and cryptoassets, need to be regulated. FATF also updated Recommendation 15 in 2018, mandating the regulation of VASPS to prevent the misuse of virtual assets in ML/TF/PF.
“Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of financial institutions.”
He noted that in May 2022, the Securities and Exchange Commission issued Regulations on the Issuance, Offering and Custody of Digital Assets and VASPs which provides a regulatory framework for business operations in Nigeria.
“In view of the above, the CBN hereby issues this guideline to provide guidance within the scope of regulation of financial institutions with respect to banking relationships with VASPs in Nigeria,” Mustapha said.
The CBN Director said the new guidelines imposed the restrictions FPR/DIR/GEN/CIR/06/010 of January 12, 2017 and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 It stated that it supersedes the older guidelines referenced. Regarding virtual currency transactions under the previous administration of President Muhammadu Buhari and former CBN Governor Godwin Enefiele.
However, Mustafa said banks and other financial institutions are still prohibited from holding, trading and/or transacting virtual currencies in their own accounts.
He noted that all banks and other financial institutions must immediately comply with the new guidelines.
Source: guardian.ng