The Central Bank of Nigeria has issued updated information on the Cryptocurrency transaction ban that was effected in February 2021, under the former CBN governor, Godwin Emefiele in its latest circular(Also known as a notice. An official document that accompanies the release of administrative regulations and rules).

What should you do with this information? Let's discuss.

When governments all around the world suddenly start to change their minds, about a particular situation that they repeatedly refuse to accept, it's only natural we are concerned especially if, their accepting the obvious isn't a result of what it is and represents but something else. Due to the recent Exchange-Traded Funds hype(ETF) from the US, many other countries are quickly aligning themselves in the same direction.

‘Finally, it seems, the US Government has landed an avenue to be able to control the crypto industry…’ perhaps this is what is going through the minds of these Nations? That's just a side attraction, what really is this new ‘leaf’ all about? More importantly, what are these guidelines? Let's analyze some of them;

The Guidelines.

The CBN circular stated that Banks and all Other Financial Institutions(OFIs) are allowed to carry out the following activities in their operations of accounts under Virtual Asset Service Providers(VASPs);

Opening of designated accounts;
Provide designated settlement accounts and settlement services;
Act as channels for FX flows and trade; and
Any other activity that may be permitted by the CBN from time to time.

“From the commencement of these Regulations, Financial Instittutions shall not open or permit the operation of any account by any person or entity to conduct the business of virtual/digital assets unless that account is designated for that purpose and opened in line with the requirement of these Guidelines,” -as stated by CBN.

It would be nice to note some of these guidelines if not all, is yet to be properly explained for full comprehension, as one of the criterion for obtaining a license from the SEC means a Virtual Asset/Digital Service Provider must have Thirty Million Naira registration fee and the sum of Five Hundred Million Naira capital deposited in a Nigerian bank account. Speculations are all abounding from different experts in the space as regards the outrageous amounts but I'm sure that's not about to change the mind of the apex bank.

Furthermore, it's good to note that section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution. In addition, the Securities and Exchange Commission (SEC) in May 2022 issued rules on Issuance, offering, and custody of digital assets and VASPs to provide a regulatory framework for cryptocurrency operations in Nigeria. This comes after the Financial Action Task Force (FATF) in 2018, updated its Recommendation 15 to require VASPs to be regulated to prevent misuse of virtual assets for Money Laundering(ML)/Terrorist Financing (TF)/Proliferation Financing of weapons of mass destruction (PF).

The only positive remark here from my own point of view is that crypto transactions are now allowed, from what I gather at least but Pending that, your registration and licensing from the SEC before you can proceed to the bank to open a VASP account as a Virtual Asset Service Provider- as one con in my remark. As a matter of fact, the requirements for account opening includes;

Evidence of a valid licence issued by the Securities and Exchange Commission (SEC) for the entity to engage in the business of VASP/DAX/DAOP.
Certified true copy of the memorandum and article of association.
Certified true copy Form CAC2-Statement of share capital and return of allotment of shares.
Certified true copy Form CAC 2.1 particulars of secretary.
Certified true copy Form CAC 3- notice of registered address.
Certified true copy of Form CAC 7-Particulars of Directors
Verifiable registered address of the company
copy of Certificate of Capital Importation (CCI) (where applicable)
Valid means of identification of all the directors, principal officers and beneficial owners of the company.
BVN of all the directors, principal officers and beneficial owners of the company.
Home address of all the directors, principal offices, and beneficial owners of the company.”

The CBN however, also stated that Banks are exempted from carrying out trades or transactions in cryptocurrency.

It is yet to be seen if anything new will arrive from this. As always, your number one crypto journalist, Clever Abaribote.

Until next time.