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- 1 The Nigerian Central Bank has uplifted its ban restricting banks from getting involved with crypto.
- 2 Section 30 of the Money Laundering Act of 2022 granted legal recognition to virtual asset service providers (VASPs).
- 3 India, Nigeria, and Vietnam have taken the lead, among lower middle-income (LMI) countries- Report.
On December 22, the Nigerian Central Bank lifted the ban allowing the bank to facilitate cryptocurrency transactions. The Central Bank of Nigeria restricted banks’ engagement with digital currencies two years earlier.
In a letter sent to all banks, the Central Bank stated that the surging demand for digital assets and cryptocurrencies globally has stringent restrictions imposed on financial institutions in 2021.
As per a statement in the circular, “However, the current trend globally has shown that there is a need to regulate the activities of virtual assets services providers (VASP) including virtual assets and cryptocurrencies.”
The apex bank added that the prevailing global trend has clearly highlighted the necessity for crypto regulation.
“The CBN issued a circular in February 2021 restricting banks and other financial institutions from operating accounts for cryptocurrency service providers due to the money laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent in their operations, as well as the lack of regulations and consumer protection measures,” it said.
Virtual currencies cannot be held, traded, or transacted in Nigerian banks. They can only facilitate crypto transactions by the new guidelines. However, Section 30 of the Money Laundering Act of 2022 granted legal recognition to virtual asset service providers (VASPs).
In May, in the 279th meeting of the Monetary Policy Committee of the CBN, CBN governor Godwin Emefiele suggested that efforts were being made to facilitate the legalisation of BTC and similar cryptocurrencies in Nigeria.
Why is Crypto Adoption Surging Worldwide?
In the past few quarters, global crypto adoption has surged significantly, and on the other hand, bitcoin price is rising steadily. BTC has already crossed the $44k mark. At the time of writing, it was trading at $43,677.11.
According to Chainalysis’ “2023 Global Crypto Adoption Index”, India, Nigeria, and Vietnam have grabbed the lead, with lower middle-income (LMI) countries demonstrating extraordinary grassroots crypto-asset adoption. Grassroot level adoption refers to nations where ordinary people are most enthusiastic about cryptocurrency.
The International Monetary Fund (IMF) has expressed concerns about the growing momentum of “crypto,” with most people preferring crypto assets such as Bitcoin and stablecoins backed by the US dollar over traditional currencies.
The shifting trend towards cryptocurrency seriously challenges the global central banking system and related monetary policies.The primary source of concern is the possibility of cryptocurrencies displacing conventional currencies. If consumers choose Bitcoin and USD-backed stablecoins, it would indicate a rejection of local money issued by any nation’s central bank.
Disclaimer
The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
