The Central Financial institution of Nigeria has lifted its ban on cryptocurrency transactions, acknowledging the worldwide pattern in the direction of regulating digital belongings, in response to a latest Reuters report. This transfer marks a departure from the financial institution’s February 2021 determination, which prohibited banks and monetary establishments from partaking in crypto-related actions as a consequence of issues over cash laundering and terrorism financing.
The change in stance aligns with the Nigerian Securities and Trade Fee’s efforts to ascertain a regulatory framework for digital belongings. In Might final 12 months, the SEC launched laws for digital belongings, signaling Nigeria’s intent to steadiness between an outright crypto ban and unregulated utilization.
Underneath the brand new tips issued on Dec. 22, banks and monetary establishments are required to open designated accounts and supply settlement companies for corporations dealing in cryptocurrencies and crypto belongings. Nonetheless, these establishments are nonetheless prohibited from straight buying and selling, holding, or transacting in cryptocurrencies.
To function within the crypto enterprise, Digital Asset Service Suppliers should receive a license from the Nigerian SEC. The CBN’s round specifies that monetary establishments should not open or function any accounts for entities engaged in digital/digital belongings with out correct designation and adherence to the brand new tips.
This coverage reversal comes amid Nigeria’s rising cryptocurrency market, pushed by a younger and tech-savvy inhabitants. Regardless of regulatory hurdles, Nigerians have more and more turned to peer-to-peer crypto buying and selling to bypass monetary sector restrictions. In response to a report by Chainalysis, Nigeria’s crypto transaction quantity surged by 9% year-over-year, reaching $56.7 billion between July 2022 and June 2023.
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