Nigerian central bank publishes rules for opening crypto accounts

Nigeria’s apex bank expanded on its decision to reverse a crypto ban on financial service providers, providing clear rules to oversee operations moving forward. 

The Central Bank of Nigeria (CBN) announced stringent rules for banks as the watchdog pivoted away from a blanket crypto ban toward regulation for virtual asset service providers, citing a need to align with global trends underpinned by blockchain technology and digital assets. 

According to the CBN, operators like crypto exchanges and digital asset brokers can only open naira-denominated bank accounts. Nigeria’s top bank also said cash withdrawals are prohibited, and companies cannot clear third-party checks via their crypto accounts. Other withdrawal types will be limited to two per quarter as well. 

In December, Africa’s most populous nation lifted its ban on crypto transactions. The shift allowed banks to service virtual asset operators and opened a path for crypto firms to acquire business licenses.

Furthermore, a consortium of local financial entities and blockchain firms is working on Nigeria’s first regulated stablecoin, cNGN. The digital currency could join the leagues of eNaira, a central bank digital currency issued by the CBN. 

However, the CBN warned that banks remained barred from holding cryptocurrencies or trading digital assets due to fraud and financial risk concerns. 

With the move, Nigeria joined other African countries in recognizing Bitcoin and cryptocurrencies as blockchain adoption is fast becoming a reality across the continent. The so-called giant of Africa ranked second on the Global Crypto Adoption Index Top 20 published by Chainalysis.