Central Bank of Nigeria Releases Guidelines for Banks on Digital Assets

According to CoinDesk, the Central Bank of Nigeria (CBN) has released guidelines for banks on digital assets, indicating a shift in the country's regulators' stance on crypto. The guidelines, published on the bank's website, offer more information on the regulators' decision to open accounts for virtual asset service providers last month. This change in policy is significant for Africa's largest economy, which previously had a ban preventing financial institutions from servicing crypto firms. The CBN stated that current global trends demonstrate a need to regulate the activities of virtual asset service providers, including cryptocurrencies and crypto assets. However, the guidelines do not lift restrictions on Nigerian banks holding or trading cryptocurrencies on their own behalf. Additionally, cash withdrawals from crypto accounts and clearing third-party checks through virtual asset-holding accounts are still prohibited. Nigeria's efforts to increase oversight of digital assets are in line with recent initiatives from neighboring African countries, where cryptocurrencies have gained popularity as a hedge against inflation. In 2022, Botswana passed a law regulating the digital assets sector despite opposition from some lawmakers. Furthermore, the Bank of Mauritius is reportedly planning to launch a central bank digital currency.