The Central Bank of Nigeria (CBN) recently introduced stringent regulations, signaling a shift from a previous blanket ban on cryptocurrencies to a structured approach for oversight over virtual asset service providers. This change reflects an effort to align with global trends in blockchain technology and digital assets.
Under these new rules, entities such as crypto exchanges and digital asset brokers can exclusively open bank accounts denominated in naira. The CBN specified stringent restrictions, including the prohibition of cash withdrawals and the exclusion of clearing third-party checks via crypto accounts. Additionally, withdrawal types will be restricted to two per quarter.
Nigeria’s reversal of its crypto transaction ban in December marked a turning point. This decision allowed banks to cater to virtual asset operators and facilitated the path for crypto firms to obtain business licenses.
Simultaneously, a collaboration between local financial entities and blockchain firms is underway to develop Nigeria’s inaugural regulated stablecoin, cNGN. This initiative aims to introduce a digital currency into the market, potentially joining the ranks of eNaira, the central bank’s digital currency.
However, the CBN maintained its stance on banks refraining from holding cryptocurrencies or engaging in digital asset trading due to persistent concerns related to fraud and financial risks.
This move places Nigeria among several African nations recognizing the significance of Bitcoin and cryptocurrencies. The continent is swiftly embracing blockchain technology, with Nigeria ranking second on the Global Crypto Adoption Index Top 20 published by Chainalysis. This signals the country’s growing recognition and involvement in the evolving landscape of digital assets and blockchain adoption across Africa.
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