New regulatory rules for the handling of cryptocurrency transactions by Deposit Money Banks (DMB) and other financial institutions have been announced by the Central Bank of Nigeria (CBN).
Remember that the CBN issued a circular in February 2021 preventing banks and other financial institutions from accepting cryptocurrency service provider accounts because of the risks associated with money laundering and terrorism funding, as well as the lack of laws and consumer protection safeguards.
But the CBN has lifted the prohibition on cryptocurrency transactions imposed by former governor Godwin Emefiele on the Nigerian banking system.
CBN Introduces Domestic Card To Save Foreign Exchange Fees
The “Guideline On Operation of Bank Account For Virtual Assets Service Providers (VASPs)” is a recently published guideline. Banks and other financial institutions are still not allowed to hold, trade, or conduct business using virtual currencies on their own account, according to the CBN.
The CBN warned that any contravention of the rule would attract a penalty of not less than N2 million.
The CBN said, “From the commencement of these Regulations, financial institutions shall not open or permit the operation of any account by any person or entity to conduct the business of virtual/digital assets unless that account is designated for that purpose and opened in line with the requirement of these Guidelines.
“An account opened in accordance with these Guidelines shall only be used for transactions on virtual/digital assets and not for any other purpose.
“No cash withdrawal shall be allowed from the account. No third-party cheque shall be cleared from the account.
See How Nigerians Reacted As UK Recognises IPOB As Terrorist Groups
“Except for settlement of a virtual/digital assets transaction which shall be done through a transfer to another designated account, withdrawal shall be only through a Managers’ Cheque or transfer to an account.”
The guidelines went on to say that financial institutions will open the designated settlement account of the SEC’s VASPs/DA companies with the CBN’s approval.
It said that all debts resulting from transactions made on the VASP5/DAs entities platform have to be paid into the specified bank accounts that they maintain.
“The designated settlement accounts shall warehouse all Naira positions of individuals with the VASPs/DAs. The designated settlement account, including any associated linked account for warehousing settlement monies, shall not be interest beadng.
Australia Govt Bans Citizens From Visiting 20 Nigerian States (See Full List)
“The details of the transactions on the VASP platform leading to settlement on the designated settlement account shall be accessible online, on real-Ume basis, to the FIs at all times. Credit to the designated settlement account shall be for the funding of Naira positions of persons on the VASP/DAs platform,” the apex bank added.
Follow us on Facebook
Post Disclaimer
The opinions, beliefs and viewpoints expressed by the author and forum participants on this website do not necessarily reflect the opinions, beliefs and viewpoints of Anaedo Online or official policies of the Anaedo Online.