Nigeria Central Bank Allows Banks More Flexibility in Handling Crypto Transactions

After nearly two years of imposing a comprehensive ban on banks dealing with digital currencies, the Central Bank of Nigeria (CBN) has decided to lift restrictions on Nigerian banks engaging in cryptocurrency transactions.

Nigeria Central Bank Allows Banks More Flexibility in Handling Crypto Transactions

In a circular issued to banks on December 22, the CBN acknowledged the escalating global demand and adoption of cryptocurrencies, deeming it unjustifiable to maintain the stringent restrictions imposed on financial institutions back in 2021. The new guidelines aim to establish minimum standards and requirements for establishing banking relationships and opening accounts for virtual asset service providers (VASPs) in Nigeria.

Furthermore, these guidelines seek to ensure robust risk management practices within the banking industry concerning the activities of licensed VASPs. However, the statement makes it clear that financial institutions are still prohibited from holding, trading, or conducting transactions in cryptocurrency using their own accounts.

In a previous report by Cointelegraph in February 2021, it was highlighted that the Central Bank of Nigeria had imposed a ban on all regulated financial institutions from offering services to crypto exchanges in the country. The recent decision marks a significant shift in the regulatory approach, reflecting the evolving landscape and growing acceptance of cryptocurrencies on a global scale.

Major Nigerian Banks Join Forces to Launch Innovative cNGN Stablecoin

Nigerian banks have joined hands to spearhead the creation and oversight of a groundbreaking stablecoin, the cNGN, aimed at delivering benefits to both tokenholders and the broader Nigerian economy.

Insider sources, opting for anonymity, reveal that the cNGN token is intricately tied to the Nigerian naira, the nation’s fiat currency, providing a stable foundation for its value.

Similar to well-known stablecoins, the cNGN boasts interoperability across various public blockchains, facilitating seamless global transfers and extending its utility on an international scale.

Key players in the cNGN initiative include Access Bank, Sterling Bank, Providus, Korapay, First Bank, Interstellar, Interswitch, Budpay, and Convexity. Diverging from the eNaira central bank digital currency, this new stablecoin is built on public blockchains such as Bantu, Polygon, Ethereum, BNB Smart Chain, and Tron. It is steered by prominent blockchain tech and fintech companies, with major banks assuming roles as licensed custodians. This collaborative effort signifies a significant stride toward harnessing the potential of digital currencies within the Nigerian financial landscape.