The Central Bank of Nigeria (CBN) officially allowed local banks to interact with virtual asset service providers (VASP) and process crypto transactions.
The Central Bank of Nigeria officially allowed virtual asset service providers (VASP) to open accounts with Nigerian banks. The ban on financial institutions interacting with cryptocurrency companies in the country was in place since 2021.
The CBN’s digital asset guidelines for all banks and other local financial institutions stipulate a number of requirements that VASPs must comply with in order to open accounts. In particular, they must:
- obtain the appropriate license to operate in the region;
- confirm the company’s registered office;
- provide a list of all directors, chief executives, and beneficiaries of the company, including copies of their credentials, residential addresses, and Bank Verification Numbers (BVN).
Nigerian banks are allowed to:
- open special accounts for VASPs;
- provide settlement services;
- facilitate the circulation of foreign exchange.
It’s worth noting that banks and other financial institutions weren’t allowed to hold crypto-assets in their accounts. Local banks are still prohibited from trading and making transactions in virtual currencies on their own behalf.
It was also revealed that some of Nigeria’s leading banks formed a consortium to develop the cNGN banking stablecoin. According to Olumide Adesina, Financial Market Analyst at Quantum Economics, the stablecoin will be pegged to the value of the Nigerian naira and will complement the digital currency of the Central Bank of Nigeria (eNaira). Members of the consortium include Access Bank, Sterling Bank, Providus, Korapay, First Bank, Interstellar, Interswitch, Budpay, and Convexity. Official sources and representatives of the CBN didn’t comment on the initiative.
This year, the technical capabilities of Nigeria’s CBDC were expanded, with the option of contactless payments added. eNaira users got the opportunity to use digital currency to pay for goods and services.
