Nigeria Lifting Ban on Bank Accounts for Crypto Firms Could Lead to Usage 'Surge'

The Central Bank of Nigeria reversed its prohibition on local banks and financial institutions serving crypto firms in a move that is likely to spur the use of cryptocurrencies in one of the world's fastest adopters of digital assets.

The decision, announced last week, rescinds a 2021 directive against institutions facilitating cryptocurrency transactions. At the time, the central bank was forced to clarify that it was not prohibiting crypto trading in the country. However, adoption continued with users switching to peer-to-peer trading.

Lifting restrictions on crypto exchanges and other service providers from opening bank accounts could boost adoption, with high-profile players like pan-African exchange Yellow Card saying it will seek a crypto license in the country under frameworks introduced in May this year.

“With the new policy fostering a regulated environment, Yellow Card anticipates a surge in user adoption and engagement in the coming months," Lasbery Oludimu, the company's chief data protection officer, told local news outlet Nairametrics on Wednesday. "The clarity provided by the regulatory framework instills trust and confidence among users, attracting more individuals and businesses into the crypto space."

Central bank circular reference FPR/DIR/PUB/CIR/002/003, yet to be published on the CBN website, says the global trend of regulating crypto prompted the change. International standard setters like the Financial Stability Board (FSB) and the International Monetary Fund (IMF) have recommended supervision of the industry rather than blanket bans.

A Nigerian crypto personality on X called the CBN circular a "Christmas present."

🇳🇬
things are about to get really interesting in Nigeria!! what a Christmas present!🎁

Nigeria's CBN just removed restrictions on crypto transactions. a 180 degree shift from the total ban in 2021.

we now have clear guidelines for crypto, but with stringent customer KYC and… pic.twitter.com/cXhKpWmVFO

— gwera 🟢🟡🔴 (@notgwera) December 22, 2023