Stakeholders within the cryptocurrency ecosystem have welcomed the recent decision by the Central Bank of Nigeria (CBN) to lift the ban on crypto transactions, emphasizing the potential for regulatory measures to contribute to new tax revenues for the government.
In a circular dated December 22, 2023, the CBN, in a marked departure from its earlier restrictive stance, directed banks to disregard the previous ban on cryptocurrency transactions. The circular, titled ‘Circular to all banks and other Financial Institutions guidelines on operations of bank accounts for Virtual Assets Service Providers,’ highlighted the evolving global trends shaping the reconsideration of the digital currency.
The CBN’s earlier circular from February 2021 had restricted banks from operating accounts for cryptocurrency service providers, citing concerns about money laundering, terrorism financing risks, and the absence of regulatory frameworks.
Chimezie Chuta, the Founder and Coordinator of Blockchain Nigeria User Group, commended the move, expressing optimism about the positive impact on the industry and the economy. Chuta acknowledged the belated nature of the decision but stressed its significance for regulation, taxation, and policymaking. He sees this shift as a step in the right direction that aligns with the global trend of embracing cryptocurrencies.
While recognizing the positive aspects of the regulatory shift, Chuta also pointed out the conditions for the Securities Exchange Commission (SEC) to adhere to for effective operation. This nuanced approach suggests that regulatory harmony will be essential for the industry’s proper functioning.
Senator Ihenyen, Lead Partner and Head of Blockchain and Virtual Assets Practice at Infusion Lawyers, underscored the importance of regulating virtual assets to ensure the soundness and safety of the financial system. He expressed gratitude that regulators would now collaborate to safeguard consumer protection and investor safety. Ihenyen emphasized that pushing digital assets underground was no longer tenable for Nigeria, given its prominent position in crypto adoption in Africa.
Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprises, emphasized the need for the CBN to establish a robust regulatory framework to address potential money laundering concerns. As the crypto industry anticipates growth and increased legitimacy, effective regulation becomes crucial for balancing innovation and safeguarding financial integrity.