CBN lifts ban on cryptocurrency transactions, issues new guidelines

The Central Bank of Nigeria (CBN) has lifted the ban on cryptocurrency transactions in the country.

This is contained in a circular titled ‘Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS)’ and dated December 22, 2023, with reference number FPR/DIR/PUB/CIR/002/003.

According to the circular signed by the apex bank’s director, Financial Policy and Regulation Department, Haruna Mustafa, the CBN issued a guideline to financial institutions under its regulatory purview regarding their banking relationship with Virtual Assets Service Providers (VASPs) in Nigeria.

It also confirmed that banks and other financial institutions were still prohibited from holding, trading and/or transacting in virtual currencies on their account.

The ICIR reported the apex bank’s issuance of a circular in February 2021, instructing banks and other financial institutions to close accounts of individuals engaged in cryptocurrency transactions.

According to the CBN, this directive was prompted by the inherent risks of money laundering and terrorism financing (ML/TF), vulnerabilities inherent in their operations, and the absence of regulations and consumer protection measures.