Bank AI

Bitcoin

Change

Read

MN Coin

<div class="cryptonews">
 <p class="is-style-lead">The Central Bank of Nigeria (CBN) has lifted its previous prohibition on cryptocurrency transactions. This move, unveiled in a circular dated Dec. 22, 2023, signifies a significant shift in Nigeria’s stance on the burgeoning crypto market in the country.</p>
 <p>The relaxation of the ban was signed into effect by Haruna Mustafa, the director of the financial policy and Regulation Department at CBN.</p>
 <figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
  <div class="wp-block-embed__wrapper">
   <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
    <p lang="en" dir="ltr">CBN Circular on lifting the banking ban on VASPs (crypto companies). pic.twitter.com/tkkiQzEZkw</p>— Uyoyo (@Uyoyo_O) December 22, 2023
   </blockquote>
  </div>
 </figure>
 <h2 class="wp-block-heading" id="cbn-issues-crypto-guidelines">CBN issues crypto guidelines</h2>
 <p>The circular outlines the procedural guidelines for banks and financial institutions to facilitate crypto transactions, focusing on account openings, foreign exchange (forex) inflows and trade for firms dealing with crypto assets.</p>
 <p>This <a rel="noopener noreferrer nofollow" title="action" href="https://thebittimes.com/tag/action.html">action</a> follows the country’s Financial Action Task Force’s 2018 update to Recommendation 15, which called for regulating Virtual Asset Service Providers (VASPs) to counter potential misuse for money laundering and terrorism financing.&nbsp;</p>
 <p>Consequently, the Money Laundering (Prevention and Prohibition) Act of 2022 now recognizes VASPs as financial institutions.</p>
 <p>In May 2022, Nigeria’s Securities and Exchange Commission then issued new rules on Digital Assets and VASPs, providing a structured, regulatory framework for their operations within the country.</p>
 <p>The ban on crypto trading was instituted in February 2021 due to concerns about potential money laundering and terrorism financing risks associated with cryptocurrencies.</p>
 <p>It was seen as a significant hindrance to the rapidly growing Nigerian crypto community, which previously enabled crypto-to-fiat deposits and withdrawals through bank accounts.&nbsp;</p>
 <p>When the policy was enacted, numerous Nigerian businesses faced challenges, with some reportedly relocating their operations abroad or closing altogether.</p>
 <div class="cn-block-related-link">
  <svg class="cn-block-related-link__icon icon" aria-hidden="true"><use xlink:href="#"></use>
  </svg> <span class="cn-block-related-link__prefix"> You might also like: </span> Hong Kong signals willingness to greenlight crypto spot ETFs
 </div>
 <h2 class="wp-block-heading" id="strong-banks-still-not-allowed-to-transact-crypto-strong"><strong>Banks still not allowed to transact crypto</strong></h2>
 <p>The CBN’s initial banning order had necessitated crypto users in Nigeria to resort to peer-to-peer trading to bypass the financial sector. A report from Chainalysis revealed that despite the ban, cryptocurrency transaction volumes in Nigeria escalated by 9% year-over-year, amounting to $56.7 billion between July 2022 and June 2023.</p>
 <p>This new directive marks a promising turn for Nigeria’s tech-savvy population, who have shown a keen interest in embracing digital currency. Investors in Nigeria can now handle crypto-centric transactions through their bank accounts, simplifying their ability to trade and engage with digital assets across various exchanges and payment services.</p>
 <p>However, the updated guidelines, which supersede those of January 2017 and February 2021, still continue to prohibit banks and financial institutions from trading or <a rel="noopener noreferrer nofollow" title="transact" href="https://thebittimes.com/tag/transact.html">transact</a>ing in virtual currencies independently, with the CBN insisting that compliance to the new guidelines is mandatory and immediate.</p>
 <h2 class="wp-block-heading" id="strong-nigeria-s-complex-dance-with-crypto-strong"><strong>Nigeria’s complex dance with crypto</strong></h2>
 <p>Nigeria has had a complicated recent history with crypto. On Aug. 9, the Association of Bureaux De Change Operators of Nigeria (ABCON), a key player in the naira-dollar exchange framework, called for a ban on&nbsp;Binance.</p>
 <p>The association cited Binance’s involvement as causing undue pressure on the local naira currency, sentiments that mirrored a statement issued by Nigeria’s Securities and Exchange Commission (SEC) in June, after flagging Binance Nigeria for operating illegally in the country.</p>
 <p>But even as Nigeria banned <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a> <a rel="noopener noreferrer nofollow" title="transact" href="https://thebittimes.com/tag/transact.html">transact</a>ions, and exchanges like Binance, it went ahead to pioneer a <a rel="noopener noreferrer nofollow" title="central" href="https://thebittimes.com/tag/central.html">central</a> bank digital currency (CBDC) known as the eNaira.</p>
 <p>As reported by crypto.news in August, Nigeria was one of a handful of emerging economies leveraging their compact size and less complex financial systems to achieve faster adoption rates of government-backed digital currencies.&nbsp;</p>
 <p>However, a study by CoinGecko at the time revealed that the uptake of the eNaira had been slow, with only about 6% of the population adopting it within the first three months of 2023.</p>
 <p>Additionally, some critics of the project suggested that the eNaira could threaten Nigeria’s financial stability. However, the CBN issued an official statement on Oct. 9, refuting those claims.</p>
 <p>The bank further clarified the distinction between cryptocurrencies like Bitcoin and the eNaira, in a comprehensive 300-page book titled “Economics of Digital Currencies: A Book of Readings”.&nbsp;</p>
 <p>The publication delved into aspects such as potential impacts on deposit liabilities, regulatory concerns, social welfare, and public sentiment regarding CBDCs.</p>
 <div class="cn-block-related-link">
  <svg class="cn-block-related-link__icon icon" aria-hidden="true"><use xlink:href="#"></use>
  </svg> <span class="cn-block-related-link__prefix"> Read more: </span> China accelerates CBDC pilot with cross-border precious metals transaction
 </div> <span class="google-news-banner__label">Follow Us on Google News</span>
</div>
<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/nigerian-central-bank-lifts-ban-on-crypto-transactions-tbt74615.html">https://thebittimes.com/nigerian-central-bank-lifts-ban-on-crypto-transactions-tbt74615.html</a></p>

Nigerian central bank lifts ban on crypto transactions

Table of Contents

TheBitTimes

Other articles published on Dec 23, 2023

Fetch.ai (FET) Approaches All-Time Highs as Bitcoin (BTC) Maintains Historical Patterns

Shiba Inu Forecasted To Reach 1 Cent, Here's When

Yearn.finance Price Trend and Projections for the Next Five Years

Divide and Conquer in the Crypto Space: Capital Allocation Strategies

Bulgaria closes investigation into Nexo citing no criminal activity

Why Ethereum may outperform Bitcoin in 2024

Join our free newsletter for daily crypto updates!