The Central Bank of Nigeria (CBN) has disclosed that cash withdrawals from accounts opened for virtual and digital assets transactions will not be possible.
According to the new ‘Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers,’ withdrawals from these accounts will only be allowed through transfer or manager’s cheque.
The guidelines emphasize that accounts opened under these regulations are designated solely for transactions involving virtual/digital assets and should not be used for any other purpose.
The objective is to provide minimum standards and requirements for banking business relationships and account opening for Virtual Assets Service Providers in Nigeria.
Financial institutions are permitted to undertake various activities related to the operation of accounts for Virtual Assets Service Providers, including opening designated accounts, providing designated settlement accounts and settlement services, acting as channels for FX flows and trade, and any other activity permitted by the CBN.
The guidelines also outline a series of requirements to protect the financial system and customers from uncertainty and fraud risks. Non-compliance with these guidelines may result in sanctions, including the prohibition from opening further designated accounts, monetary penalties, and suspension of the operating license of a financial institution.
This move follows the CBN’s policy shift towards being more open to the regulation of crypto assets, in contrast to its earlier stance of restricting them from the formal banking sector. The guidelines are part of the framework for the reintroduction of crypto into the formal banking sector, reflecting the evolving regulatory approach to digital assets in Nigeria.
