SAT, DEC 23 2023-theGBJournal|The Central Bank of Nigeria (CBN) late Friday released a circular reiterating the prohibition of banks and other financial institutions from holding, trading and/or transacting in virtual currencies on their own account.
It also provided new guidelines on operations of bank accounts for virtual assets service providers (VASPs).
The regulator said the Guidelines supersedes the CBN’s circulars referenced FPR/DIR/GEN/CIR/06/010 of January 12, 2017 and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 on the subject.
It urged all banks and financial institutions to immediately comply with provisions of the guidelines.
In the circular, the CBN also argued that there is no need to regulate the activities of VASPs, citing current trends globally.
The apex had in February 2021, issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers in view of what it said is ”the money laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent in their operations as well as the absence of regulations and consumer protection measures.
However, in the latest circular, the CBN cited Section 30 of Money Laundering (Prevention and Prohibition) Act, 2022 which it says recognizes VASPs as part of the definition of a financial institution.
The CBN noted that the Securities and Exchange Commission (SEC) had in May 2022 issued Rules on Issuance, Offering and Custody of Digital Assets and VASPs to provide a regulatory framework for their operation in Nigeria.
”In view of the foregoing, the CBN hereby issues this Guideline to provide guidance to financial institutions under its regulatory purview in respect of their banking relationship with VASPs in Nigeria,” the CBN said.
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