The Central Bank of Nigeria has changed its stance on crypto assets in the country and asked banks to disregard its earlier ban on crypto transactions.
This is according to a circular
dated December 22, 2023, with reference number FPR/DIR/PUB/CIR/002/003, and
signed by the apex bank’s Director, Financial Policy and Regulation Department,
Haruna Mustafa.
The circular is titled
‘Circular to all Banks and other Financial Institutions Guidelines on
Operations of Bank Accounts for Virtual Assets Service Providers (VASPS).’
The apex bank stated that
current trends globally have shown the need for crypto regulation.
It said, “The CBN, in February
2021 issued a circular restricting banks and other financial institutions from
operating accounts for cryptocurrency service providers in view of the money
laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent
in their operations as well as the absence of regulations and consumer protection
measures.
“However, current trends
globally have shown that there is a need to regulate the activities of virtual
assets service providers (VASPs) which include cryptocurrencies and crypto
assets. Following this development, the Financial Action Task Force (FATF) in
2018 also updated its Recommendation 15 to require VASPS to be regulated to
prevent misuse of virtual assets for ML/TF/PF.
“Furthermore, Section 30 of the
Money Laundering (Prevention and Prohibition) Act, 2022 recognises VASPs as
part of the definition of a financial institution.
“In addition, the Securities
and Exchange Commission in May 2022 issued Rules on Issuance, Offering and
Custody of Digital Assets and VASPs to provide a regulatory framework for their
operations in Nigeria.
“In view of the foregoing, the CBN hereby issues this guideline to provide guidance to financial institutions under its regulatory purview in respect of their banking relationship with VASPs in Nigeria. “
The apex bank noted that this
new guideline supersedes its old ones referenced FPR/DIR/GEN/CIR/06/010 of
January 12, 2017, and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 on the
subject.
It also affirmed that banks and
other financial institutions are still prohibited from holding, trading and/or
transacting in virtual currencies on their own account.
It added all banks and other
financial institutions are required to immediately comply with its new
guideline.
In its circular with reference
number BSD/DIR/PUB/LAB/014/001, dated February 5, 2021, the apex bank reminded
banks that dealing in crypto currencies or facilitating payments for cryptocurrency
exchanges was prohibited.
At the time, it asked banks to
identify persons or entities transacting in or operating crypto currency
exchanges within their systems and ensure that their accounts were closed.
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