The Central Bank of Nigeria has issued regulatory guidelines for transactions in cryptocurrency by Deposit Money Banks and other financial institutions in the country.
This follows the lifting of restrictions imposed on cryptocurrency transactions in the Nigerian banking system imposed during the tenure of former CBN Governor, Godwin Emefiele.
Recall that in February 2021 the CBN issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers.
This, according to the regulator, was due to the money laundering and terrorism financing risks as well as the absence of regulations and consumer protection measures in place.
Under the new regulation 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.
“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 bank stated.
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.
“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 beadng.
“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 has also imposed a penalty of not less than N2m for any entity that contravenes the new rule.
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