The Central Bank of Nigeria (CBN) has introduced new guidelines for the operations of bank accounts related to virtual assets and cryptocurrencies. In these guidelines, the CBN has disclosed that cash withdrawals will not be possible from accounts opened for virtual and digital assets transactions. Withdrawals from such accounts will only be permitted through transfers or manager’s cheques.
The CBN stated that accounts opened under these new guidelines should be used exclusively for transactions involving virtual and digital assets and not for any other purposes. The guidelines aim to provide minimum standards and requirements for banking relationships and account openings for Virtual Assets Service Providers (VASPs) in Nigeria.
According to the CBN’s directives, no third-party cheques will be cleared from these accounts, and cash withdrawals are strictly prohibited. The withdrawal process shall only be allowed through a manager’s cheque or transfer to another designated account, especially for settling virtual/digital assets transactions.
The CBN’s move comes as a shift in its stance towards cryptocurrencies, signaling a more open approach to regulation rather than the previous restriction of crypto assets from the formal banking sector. The new guidelines provide a framework for the reintroduction of cryptocurrencies into the formal banking sector.
Financial institutions are now permitted to undertake various activities in their operations related to virtual assets, including opening designated accounts, providing designated settlement accounts and services, acting as channels for foreign exchange flows and trade, and other activities authorized by the CBN.
The guidelines also outline an extensive list of requirements to protect the financial system and customers from uncertainties and fraud risks. Financial institutions failing to comply with these guidelines may face sanctions such as the prohibition from opening further designated accounts, monetary penalties, and, in severe cases, suspension of their operating license.
The CBN’s move is seen as an effort to regulate the growing crypto market in Nigeria, ensuring consumer protection and investor safety while acknowledging the country’s significant position in cryptocurrency adoption in Africa and globally.
