News

CBN Releases Fresh Guidelines For Cryptocurrency Transactions

Published

11 months ago

Jan 3, 2024.

Eko Hot Blog reports that the Central Bank of Nigeria (CBN) has released fresh regulatory guidelines for the operation of cryptocurrency transactions by Deposit Money Banks (DMB) and other financial institutions.

Recall that the CBN had in February 2021 issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers due to the money laundering and terrorism financing risks and the absence of regulations and consumer protection measures.

However, the CBN had recently removed the ban on cryptocurrency transactions in the Nigerian banking system by former CBN Governor Godwin Emefiele.

Governor Of The Central Bank, Michael Cardoso

In a new guideline titled, ‘Guideline On Operation of Bank Account For Virtual Assets Service Providers(VASPs),’ the CBN said banks and other financial institutions are still prohibited from holding, trading, and/or transacting in virtual currencies on their own account.

The CBN warned that any contravention of the rule would attract a penalty of not less than N2 million.

The CBN said, “From the commencement of these Regulations, financial institutions shall not open or permit the operation of any account by any person or entity to conduct the business of virtual/digital assets unless that account is designated for that purpose and opened in line with the requirement of these Guidelines.

“An account opened in accordance with these Guidelines shall only be used for transactions on virtual/digital assets and not for any other purpose.

No cash withdrawal shall be allowed from the account. No third-party cheque shall be cleared from the account.

“Except for settlement of a virtual/digital assets transaction which shall be done through a transfer to another designated account, withdrawal shall be only through a Managers’ Cheque or transfer to an account.”

The guideline further explained that the designated settlement account of SEC’s VASPs/DA entities will be opened by financial institutions with the permission of the CBN.

It disclosed that all obligations arising from transactions within the VASP5/DAs entities platform shall be settled into the designated settlement accounts maintained by them in the banks.

“The designated settlement accounts shall warehouse all Naira positions of individuals with the VASPs/DAs. The designated settlement account, including any associated linked account for warehousing settlement monies, shall not be interest beading.

“The details of the transactions on the VASP platform leading to settlement on the designated settlement account shall be accessible online, on real-Ume basis, to the FIs at all times. Credit to the designated settlement account shall be for the funding of Naira positions of persons on the VASP/DAs platform,” the apex bank added.

Click To Watch Our Video Of The Week