April 19, 2024
Nigeria's Central Bank Eases Stance on Crypto
Latest Cryptocurrency News

Nigeria Shifts Towards Regulating Digital Assets

The Central Bank of Nigeria (CBN) has issued new guidelines for banks regarding digital assets, indicating a shift towards a more lenient approach to crypto regulation in the country. These guidelines, made public on the bank’s website, offer detailed insights into the recent decision by regulators to permit accounts for virtual asset service providers. This marks a significant reversal for Africa’s largest economy, which previously imposed a lengthy ban preventing financial institutions from catering to crypto firms.

The CBN stated on Tuesday that “current trends globally have shown that there is a need to regulate the activities of virtual asset service providers, which include cryptocurrencies and crypto assets.” However, despite this shift, the guidance does not remove restrictions on Nigerian banks holding or trading cryptocurrencies for their own use. Additionally, the rules explicitly prohibit cash withdrawals from crypto accounts and the clearing of third-party checks through accounts holding virtual assets.

Nigeria’s efforts to enhance oversight of digital assets align with similar moves in neighboring African countries, where cryptocurrencies have gained popularity as a hedge against inflation. Botswana, in 2022, enacted legislation regulating the digital asset sector, despite facing opposition from some lawmakers. Meanwhile, the Bank of Mauritius has reportedly been making plans to introduce a central bank digital currency, as per Bloomberg News.

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