Nigerian Central Bank Eases Rules for Banks Participating in Crypto Transactions

The Central Bank of Nigeria imposed a ban on cryptocurrency services for regional banks in 2021. However, in accordance with the recent guidelines the Nigerian Central Bank has set minimum legal requirements for Virtual Asset Services Providers (VASPs) and banking services such as custodial features.

In accordance with the recent regulatory changes, the Nigerian Central Banking Authority has lifted the restrictions on regional banking firms for offering cryptocurrency trading services.

The central bank issued a circular noting that the restriction was lifted based on the increasing demand for digital asset adoption across the globe.

The statement retained that the recent global trends have established the requirements of regulating Virtual Asset Service Providers (VARAs) that are inclusive of cryptocurrencies and crypto assets.

The new policy charter has set minimum standards and mandatory requirements for creating banking business concepts and opening VASP trading accounts within the region.

At the same time, the guidelines also shed light on setting an effective risk management practice within the banking sector that is geared towards the certification and registration process of VASPs.

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Central Bank of Nigeria to Set Licensing Requirements for VASPs

 Central Bank of Nigeria has also issued a statement retaining that financial institutions cannot hold, trade, or perform cryptocurrency trading from their personalized accounts. In 2021, The Central Bank of Nigeria barred all financial firms from working with cryptocurrency trading platforms within its jurisdiction.

Recently, the local blockchain association called upon the federal government of Nigeria directing them to revise regulatory requirements that will pave the way for the widespread integration of approved blockchain networks within the nation.

Obinna Iwuno, President of Stakeholders of Blockchain Association of Nigeria (SiBAN), put an emphasis on the importance of introducing a regulatory framework to accelerate the utility of blockchain technology in various sectors of economy. 

Iwuno further noted that Nigeria has gathered all resources to apply the new blockchain technology. He further noted that the government has made all the necessary preparations for blockchain tech integration and intends to place Nigeria at the forefront of digital economy development provided that the program is successfully implemented.

African Leaders Introduced Various Crypto Initiatives in 2023

Details from have listed major African nations such as Nigeria, Kenya, Ghana, South Africa, and Zimbabwe as the top 5 states on the route for Bitcoin adoption. The data projection is based on the highest demand for digital currencies in several jurisdictions across the continent.

South Africa added cryptocurrencies to taxation laws for the first time since 2018 and designated them as digital assets. The Advertising Regulatory Board also added new policies to protect investors from unregulated advertisements. SA financial regulators also obligated digital asset firms to issue a cryptocurrency trading license before year-end.

Regulators of Kenya proposed a new cryptocurrency bill to add 3% taxation on cryptocurrency and NFT trades and 15% on monetized digital media. At the same time, Kenya also gained appreciation on account of its initiative to write the first draft crypto regulatory framework in association with the local Blockchain Association.

Central African Republic (CAR) became the first African nation to adopt Bitcoin as legal tender in 2022. The nation also issued Sango Coin a government-backed digital currency project around the same time. CAR has also set up a 15-member committee for drafting a cryptocurrency bill regarding tokenization at the beginning of 2023.

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