Nigeria's Central Bank Lifts Over Two-Year Cryptocurrency Ban | Regulatory Guidelines Also Released

Explore the latest update from Nigeria, where the Central Bank has lifted a longstanding cryptocurrency ban.

Understand how this significant move, combined with newly released regulatory guidelines, is set to invigorate the already popular crypto market in Nigeria.

Easing of Banking Restrictions for Crypto Asset Companies

It has been reported by multiple media sources that the Central Bank of Nigeria has lifted the "Cryptocurrency Ban" that had been in effect for over two years, by establishing guidelines to regulate crypto asset service providers.

In February 2021, the Central Bank of Nigeria issued a notice to all financial institutions in the country, stating that "providing bank account services related to crypto asset transactions is prohibited," effectively banning bank account services for cryptocurrency exchanges and individual investors.

However, a notice issued last week reported the lifting of this "Cryptocurrency Ban."

The background to this relaxation of restrictions is attributed to "the increasing global demand for cryptocurrencies and the rising number of cryptocurrency adoption cases, making it inappropriate to maintain the ban."

Publication of Crypto Asset Regulatory Guidelines

Despite the lifting of the cryptocurrency ban, the Central Bank of Nigeria, considering the global trends in the cryptocurrency market, has expressed the need to "appropriately regulate the activities of cryptocurrency service providers" and has published the "Crypto Asset Regulatory Guidelines."

The latest crypto asset regulatory guidelines detail "under what circumstances bank accounts can be opened by cryptocurrency-related companies" and "the necessary documents for account opening by these companies."

It is reported that "cryptocurrency service providers can open accounts only if they obtain approval from financial institutions."

Furthermore, cryptocurrency service providers who wish to operate cryptocurrency-related businesses in Nigeria must obtain a license from the Nigerian Securities and Exchange Commission (SEC).

It is also reported that "banks and other financial institutions are still prohibited from holding or trading cryptocurrencies in their own accounts."

In case of violation of these guidelines, sanctions such as license revocation, fines, and criminal prosecution are also reported to be applicable.

With the lifting of the cryptocurrency ban, banks and financial institutions will now be able to provide services to cryptocurrency exchanges, and it is anticipated that the cryptocurrency market in Nigeria, already popular, will further thrive due to the establishment of a healthy market through the crypto asset regulatory guidelines.

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