The Central Bank of Nigeria (CBN) has implemented measures restricting cash withdrawals from accounts dedicated to virtual asset transactions.
According to the new guidelines, withdrawals from these accounts are limited to transfers or manager’s cheques.
The CBN’s shift towards crypto regulation is outlined in the ‘Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers.’
These guidelines specify that accounts opened under this framework are exclusively for virtual/digital asset transactions and must not serve any other purpose. Cash withdrawals from such accounts are strictly prohibited, and third-party cheques will not be cleared.
The withdrawal options are limited to transfers to another designated account, a manager’s cheque, or a transfer to an account.
In a December circular, the CBN signaled a policy change on crypto assets, allowing banks to facilitate crypto transactions.
The recent guidelines, introduced alongside the circular, establish the framework for reintroducing crypto into the formal banking sector.
The objectives of these guidelines include setting minimum standards and requirements for banking business relationships and account opening for Virtual Assets Service Providers in Nigeria.
Financial institutions are now permitted to undertake various activities in their operations for Virtual Assets Service Providers, including opening designated accounts, providing designated settlement accounts and settlement services, acting as channels for foreign exchange (FX) flows and trade, and engaging in any other activities permitted by the CBN.
The CBN emphasizes the importance of adherence to these guidelines, warning of possible sanctions for non-compliance. Penalties may include the prohibition from opening further designated accounts, monetary penalties not less than 2,000,000.00, and suspension of the operating license of a financial institution.
The CBN’s policy shift towards crypto regulation reflects a more open approach, aligning with global trends and acknowledging the significance of digital assets in Nigeria’s financial landscape.
