- Nigeria’s blockchain sector has requested that the federal government establish rules.
- The purpose of these regulations is to lay out the ground rules for VASPs.
Constraints on Nigerian banks aiding cryptocurrency transactions have been removed by the Central Bank of Nigeria (CBN), almost two years after a complete ban on banks working with digital currencies was enforced.
Moreover, the CBN acknowledged in a circular addressed to banks on December 22 that the rising worldwide demand and usage of crypto renders the harsh regulations put on financial institutions in 2021 unsustainable.
Banking on Current Trends
The purpose of these regulations is to lay out the ground rules for virtual asset service providers (VASPs) in Nigeria to follow while dealing with financial institutions and creating accounts.
The statement noted:
“However, current trends globally have shown that there is a need to regulate the activities of virtual assets service providers (VASPs) which include cryptocurrencies and crypto assets.”
Furthermore, the rules are an attempt to make sure that licensed VASPs’ operations are subject to strong risk management procedures in the banking sector. It is still illegal for banks and other financial organizations to use their own accounts to keep, trade, or deal in cryptocurrencies, according to the statement.
Reportedly, all authorized financial institutions in Nigeria were barred from providing services to cryptocurrency exchanges in February 2021 by the Central Bank of Nigeria.
In other recent developments, Nigeria’s blockchain sector has formally requested that the federal government establish rules to encourage the broad use of the country’s recently adopted blockchain policy.
Also, a legislative framework is urgently needed to expedite the integration of blockchain technology into several economic sectors, according to Obinna Iwuno, president of the Stakeholders in Blockchain Association of Nigeria (SiBAN).
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