The Central Bank of Nigeria (CBN) has just lifted the ban on banks handling crypto transactions. This move comes after two years of requests from crypto enthusiasts and companies.
The CBN stated that global trends highlight the importance of regulating crypto activities, and now recognizes crypto companies, termed Virtual Asset Service Providers (VASPs), as financial entities under Section 30 of the Money Laundering Act of 2022.
The CBN also referred to guidelines from the Nigerian Securities Exchange Commission (SEC) released in 2022, emphasising the need to lift the ban.
Banks are now allowed to facilitate crypto transactions, open accounts for VASPs, provide settlement accounts, and act as channels for foreign exchange flows and trade.
However, banks are prohibited from trading, holding, or transacting cryptocurrencies. Crypto companies wanting to use banks must obtain a licence from the SEC, involving a minimum paid-up capital of ₦500 million ($553,000), registration with the Corporate Affairs Commission (CAC), and submission of a white paper to the SEC for token issuance.
The SEC will review the white paper, taking 30 days to decide if the tokens can be launched in Nigeria.
Additionally, banks are required to obtain the Bank Verification Numbers (BVNs) of all directors and owners of crypto companies using their services, along with implementing stringent Know Your Customer (KYC) measures.
This development marks a significant shift in the crypto landscape in Nigeria.
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