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Nigeria Lifts Cryptocurrency Ban and Issues New Regulations

The cryptocurrency industry in Nigeria is set for a revival after the Central Bank of Nigeria (CBN) lifted its ban on crypto exchanges and issued new guidelines for companies operating in the virtual asset space.

Background

The CBN issued a ban in February 2021 preventing financial institutions from providing services to crypto companies. This ban cut most Nigerian crypto exchanges off from the banking system.

However, under new regulations released by the Nigerian Securities and Exchange Commission (SEC), crypto exchanges and service providers will now be allowed to open bank accounts and access banking services.

New Regulations

To operate legally in Nigeria, crypto companies must now:

  • Obtain a license from the SEC and register with the Corporate Affairs Commission (CAC)
  • Maintain a minimum paid-up capital of ₦500 million ($553,000)
  • Banks will collect the Bank Verification Number (BVN) of crypto company owners
  • Comply with Know Your Customer (KYC) and anti-money laundering measures
  • Companies issuing tokens must submit a white paper to the SEC for approval

Impact on Nigeria’s Crypto Industry

The lifting of the crypto ban and new regulations are expected to accelerate growth in Nigeria’s crypto industry. Nigeria ranks second on Chainalysis’ global crypto adoption index.

Despite crypto price volatility, crypto transactions in Nigeria increased 9% in September according to Chainalysis.

The Nigerian government’s move toward regulatory clarity creates opportunities for the country’s large crypto economy and young, tech-savvy population.

Nigerian blockchain experts have advocated for a more forward-looking approach to crypto, and the National Information Technology Development Agency (NITDA) is working on a national blockchain policy.

With the restoration of banking services for crypto firms, Nigeria’s potential for growth in the crypto industry is significant.

For more information see CBN Lifts Restrictions on Crypto Exchanges, Issues Guidelines

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