Nigeria's central bank has recently issued its inaugural guidelines for banks seeking to open cryptocurrency accounts while maintaining its ban on banks holding or trading virtual assets themselves. These guidelines, published on the central bank's website on Tuesday, provide further details on the regulator's decision last month to lift the prohibition on banks operating accounts for cryptocurrency service providers.

In a statement, the central bank stated that recent global trends have highlighted the need to regulate the activities of virtual asset service providers, including cryptocurrencies and crypto assets. Nigeria has joined other African regulators in extending its oversight of cryptocurrencies, prompted by a series of corporate collapses, culminating in the bankruptcy of Bahamas-based exchange FTX in April. The country, the crypto hub of the continent, has experienced a surge in virtual currency adoption, partly due to the significant decline in the value of the nation's fiat currency.

According to the central bank, only naira-based accounts will be permitted for cryptocurrency transactions. Additionally, the guidelines stipulate that there will be no cash withdrawals allowed. The restrictions also prohibit clearing third-party checks through crypto accounts and limit withdrawals to two per quarter.

According to Triple-A data, it is reported that 22 million Nigerians currently own cryptocurrencies. In a recent survey conducted by ConsenSys and YouGov, it was found that 99% of Nigerians are aware of the existence of cryptocurrencies, indicating that Nigeria has the highest level of cryptocurrency awareness globally. Favorable crypto regulations in the West African country are set to rapidly accelerate crypto adoption on the continent.

Cryptocurrency has made significant progress in the eyes of African governments in recent times. South African regulators are currently reviewing crypto exchange applications for licensing, while Kenya is soliciting the help of private individuals to draft comprehensive regulations. Meanwhile, Mauritius aspires to integrate a central bank digital currency as a key component of its financial technology ecosystem.

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