Nigeria Nigeria's Central Bank Reverses Crypto Ban, Calls for Regulations

In a surprising turn of events, the Central Bank of Nigeria (CBN) has reversed its stance on cryptocurrency transactions, urging banks to disregard the earlier ban. A circular dated December 22, 2023, signed by the Director of Financial Policy and Regulation, Haruna Mustafa, revealed the shift in policy.

Titled 'Circular to all Banks and other Financial Institutions Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (VASPS),' the circular emphasized the global need for crypto regulation.

The CBN acknowledged the evolving landscape, citing trends that necessitate the oversight of virtual assets service providers, including cryptocurrencies. The circular outlined the regulatory developments, such as the Financial Action Task Force (FATF) recommendations and the Securities and Exchange Commission's issuance of rules in May 2022.

The CBN's new guideline replaces previous ones and asserts that while banks can now engage with VASPs, they remain prohibited from holding, trading, or transacting in virtual currencies on their own account.

The directive mandates immediate compliance, signaling a pivotal shift in Nigeria's approach to cryptocurrency regulation