The Central Bank of Nigeria (CBN) has recently announced a significant policy reversal regarding cryptocurrency companies. According to a report by BusinessDay, the CBN has instructed lenders to open accounts for crypto firms, marking a reversal of the ban imposed in 2021. This decision aligns with new regulations issued by the Securities and Exchange Commission (SEC) for crypto companies operating in the country.
New Regulations for Crypto Companies
Under the new regulations, Nigerian banks are now permitted to open bank accounts for crypto companies, also known as Virtual Asset Service Providers (VASPs). These banks can provide designated settlement accounts and act as channels for foreign exchange flows and trade. However, crypto companies must obtain a license from the SEC to operate and meet certain requirements. VASPs, including crypto exchanges, are obligated to pay a minimum paid-up capital of ₦500 million ($553,000) and must be duly registered with the Corporate Affairs Commission (CAC). Additionally, companies wishing to issue tokens must submit a white paper to the SEC and await approval before launching them in Nigeria.
To ensure compliance, banks are required to obtain the Bank Verification Number (BVN) of all directors and owners of the crypto companies they serve. The guidelines also include stringent Know Your Customer (KYC) measures that VASPs must adhere to before establishing a banking relationship.
Promoting Growth in Nigeria’s Crypto Industry
The lifting of the ban on crypto companies comes at a crucial time for Nigeria, as the country’s currency has experienced significant devaluation this year. This has prompted residents to turn to cryptocurrencies as an alternative store of value. With the reopening of banking channels, Nigeria’s crypto industry is poised for further growth.
“The recent steps by the National Information Technology Development Agency (NITDA) in pushing for the first National Blockchain Policy in May have been praised by experts. This move will protect creators, investors, and users,” said Adedeji Owonibi, CEO of Convexity.
During a summit, experts highlighted the regulatory hurdles faced in multiple jurisdictions and emphasized the lack of proper understanding of blockchain technology as key factors leading to the CBN ban two years ago.
