In a groundbreaking announcement, the Central Bank of Nigeria (CBN), under the directorship of Haruna B. Mustafa, has issued new guidelines on the operations of bank accounts for Virtual Assets Service Providers (VASPs), making the Nigerian Naira truly borderless in the digital space. This comes as a significant shift from the CBN's previous circular in February 2021, where banks were restricted from operating accounts for cryptocurrency service providers due to money laundering and terrorism financing risks.
The CBN's latest directive aligns with global trends, recognizing the necessity to regulate the activities of VASPs, including cryptocurrencies and crypto assets. This move is reinforced by the Financial Action Task Force's (FATF) recommendation in 2018, which emphasized the importance of regulating VASPs to prevent the misuse of virtual assets for illicit activities.
Section 30 of the Money Laundering (Prevention and Prohibition) Act 2022 has also acknowledged VASPs as part of the definition of a financial institution. Moreover, the Securities and Exchange Commission (SEC) in May 2022 issued rules providing a regulatory framework for the issuance, offering, and custody of digital assets and VASPs in Nigeria.
The newly issued guidelines supersede previous circulars and mark a significant milestone in the integration of cryptocurrencies into the formal financial sector. However, banks and financial institutions are still prohibited from holding, trading, and/or transacting in virtual currencies on their own account.
Under the new guidelines, banks and Other Financial Institutions (OFIs) are now permitted to undertake specific activities in their operations with VASPs, including opening designated accounts, providing settlement services, acting as channels for foreign exchange flows and trade, and engaging in other activities permitted by the CBN from time to time.
This announcement follows the recent report that the CBN has directed banks to disregard the initial ban on cryptocurrencies, emphasizing the need to manage cryptocurrency in line with global trends.
SenexPay applauds this regulatory development, as it paves the way for greater financial inclusion and flexibility in the cryptocurrency space. The guidelines provide a clear framework for banks and VASPs, ensuring a more secure and regulated environment for crypto transactions.
As we embrace this transformative era of a borderless Crypto-Naira, SenexPay remains committed to providing innovative and secure financial solutions for our users.
Stay tuned for more updates as we navigate this exciting chapter in the world of digital finance!
#SenexPay #CryptoNaira #BorderlessFinance #CBNGuidelines
Nigeria Lifts Cryptocurrency Ban - SenexPay Hails New Era of Crypto-Naira Following Central Bank's Policy Change
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