Cryptocurrency: CBN Implements Strict Rules on Withdrawal
The Central Bank of Nigeria has revealed new guidelines restricting cash withdrawals from accounts opened for virtual and digital asset transactions.
According to the apex bank, withdrawals from these accounts will only be permitted through transfer or a manager’s cheque. This policy is outlined in the ‘Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers.’
The bank clarified that accounts opened under these guidelines are solely for virtual/digital asset transactions and not for any other purpose.
The guideline emphasizes, “No cash withdrawal shall be allowed from the account. No third-party cheque shall be cleared from the account.”
In a December 2023 circular, the banking regulator announced a significant policy change regarding crypto assets, signaling a more open approach to regulation compared to its previous stance of restricting crypto assets from the formal banking sector.
The new policy direction encourages banks to facilitate crypto transactions, and the published guideline serves as the framework for reintroducing crypto into the formal banking sector. The CBN stated, “The Guidelines shall apply to banks and other financial institutions under the regulatory purview of the CBN.”
Financial institutions are now permitted to undertake various activities, including opening designated accounts, providing designated settlement accounts and settlement services, acting as channels for FX flows and trade, and other activities permitted by the CBN.
The CBN emphasized the need for financial institutions to adhere to the guidelines, warning that non-compliance could lead to severe consequences, including the suspension of operating licenses. Sanctions may include prohibiting further designated account openings, imposing monetary penalties, and suspending the operating license of a financial institution.
Commenting on the guideline, the CBN highlighted that it aims to provide minimum standards and requirements for banking business relationships and account opening for Virtual Assets Service Providers in Nigeria.
