A change in the attitude of the nation’s regulators towards cryptocurrencies is evident in the instructions on digital assets that the Central Bank of Nigeria (CBN) has released for banks. Additional details about the regulators’ decision to create accounts for virtual asset service providers last month can be found in the rules, which are available on the bank’s website. For the largest economy in Africa, where there was previously a prohibition on financial institutions supporting cryptocurrency companies, this legislative shift is significant. According to the CBN, there is a need to control the operations of companies that provide services for virtual assets, such as cryptocurrencies and crypto assets, given the status of the world today.
The rules do not, however, remove limitations on Nigerian banks’ ability to own or trade cryptocurrencies on their own account. Furthermore, it is still forbidden to withdraw money from cryptocurrency accounts or use virtual asset-holding accounts to pay third-party checks. Nigeria’s attempts to strengthen regulation of digital assets are consistent with previous moves taken by neighboring African nations, where cryptocurrencies have become more and more popular as an inflation hedge. Despite opposition from certain politicians, Botswana passed a law governing the digital assets sector in 2022. In addition, it has been claimed that the Bank of Mauritius intends to introduce a digital currency for central banks.
