Nigeria’s Central Bank Implements Strict Rules on Banks After Lifting Crypto Ban

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Nigeria’s central bank has recently unveiled new guidelines governing the opening of cryptocurrency accounts by banks. This move follows the regulatory decision to lift the ban on banks facilitating accounts for cryptocurrency service providers. The guidelines, posted on the central bank’s website, aim to regulate the activities of virtual asset service providers, including cryptocurrencies and cryptoassets, in line with global trends.

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The restrictions outlined specify that only naira-based accounts will be permitted for cryptocurrency transactions, and cash withdrawals will not be allowed. Additionally, the guidelines prohibit clearing third-party checks through crypto accounts and impose a limit of two withdrawals per quarter.

This regulatory development aligns with a broader trend across Africa, where regulators are increasing oversight of cryptocurrencies in response to concerns raised by corporate collapses, including the bankruptcy of the Bahamas-based exchange FTX in April. Nigeria, being the continent’s most populous nation, has experienced a notable rise in virtual currency adoption, partly driven by the depreciation of the national fiat currency.

While South Africa has mandated crypto exchanges to apply for licenses by the end of 2023, Botswana passed regulations in 2022 to address the sector’s potential risks, referred to as the “Wild West” of finance. Kenya, although not yet licensing cryptocurrency activities, has refrained from outlawing them as it works on developing regulatory frameworks.

In a separate development, the Bank of Mauritius has been actively pursuing plans to introduce a central bank digital currency (CBDC) as part of its broader strategy to embrace financial technology in the region.

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