Nigerian Central Bank Lifts Restrictions on Crypto Transactions

Nigeria’s Central Bank (CBN) has eased regulations for banks promoting cryptocurrency transactions. This move signals a departure from previous restrictive policies and demonstrates a recognition of the evolving role of digital currencies in the country’s financial landscape.

According to a letter sent to the banks, the decision to lose rules on banks engaging in crypto transactions is a significant development for Nigeria. The central bank acknowledges the growing importance of cryptocurrencies and the need for a regulatory framework that accommodates their presence.

Nigeria to Maintain Financial Integrity with New Adjustment

Undoubtedly, this regulatory adjustment is expected to have positive implications for both the banking sector and the broader cryptocurrency community in Nigeria. Banks can now explore and offer a wider array of services related to digital currencies, potentially fostering innovation and financial inclusion.

However, the guidelines also stress that financial institutions are banned from holding, trading, or conducting transactions in cryptocurrency with their accounts.

It is worth noting that this regulatory adjustment doesn’t imply a lack of oversight. Rather, it signifies a shift towards a more nuanced and adaptive regulatory framework. Striking the right balance between encouraging innovation and maintaining financial integrity is crucial, and the central bank’s move appears to be a step in that direction.

Nigeria’s Plan for CBDC

Recall that the CBN took a step forward in July this year to encourage the use of e-Naira, its central bank’s digital currency. In the past, there have been doubts about Nigeria’s CBDC success, nonetheless, the country has worked hard to introduce the eNaira after receiving authorization from the Federal High Court.

There has also been the integration of QR codes to boost the adoption rate of the e-Naira. The deputy director of the CBN’s risk management department Joseph Angaye mentioned that the banking regulator is committed to leveraging innovative technology to improve users’ experience.

He announced that the e-naira would be furnished with some programmability features that could limit CBDC payments exclusively to designated government programs, and in return, reduce the risk of fraud.

Central Banks Floats Draft Law for the Crypto Ecosystem

Earlier in the year, Morrocco’s Central Bank’s governor, Abdellatif Jouahiri, said the country’s draft law for the nascent industry has been prepared. Furthermore, the regulation will serve as a standard in protecting the integrity of its cryptocurrency sphere by coordinating the crypto service providers and ensuring they conform to laid down principles.

Also, the governor stressed that the legislation does not in any way attempt to hamper growth or innovation in the industry but is rather seeking to protect investors from associated risks in dealing with highly speculative markets. 

Likewise, Brazil just approved a bill for the crypto industry after it was passed by the nation’s Senate and Chamber of Deputies.