The Central Bank of Nigeria (CBN) has declared that cash withdrawals will no longer be permitted from accounts specifically opened for virtual and digital assets transactions.
The directive, outlined in the ‘Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers,’ states that withdrawals from these accounts can only be facilitated through transfers or manager’s cheques.
The CBN emphasized that accounts created under these new guidelines are solely intended for transactions involving virtual or digital assets and must not be utilized for any other purpose.
The guidelines state, “No cash withdrawal shall be allowed from the account. No third-party cheque shall be cleared from the account. The withdrawal shall be only through a manager’s cheque or transfer to an account, except for settlement of a virtual/digital assets transaction which shall be done through a transfer to another designated account.”
This policy shift comes as part of the CBN’s efforts to regulate crypto assets, marking a departure from its previous stance of restricting crypto assets from the formal banking sector.
Recall that In a December circular, the banking regulator directed banks to facilitate crypto transactions and announced a more open approach to crypto asset regulation.
The newly introduced guidelines serve as the framework for reintegrating crypto into the formal banking sector. The CBN clarified, “The Guidelines shall apply to banks and other financial institutions under the regulatory purview of the CBN,” outlining specific objectives such as providing minimum standards for banking business relationships with Virtual Assets Service Providers in Nigeria.
Financial institutions are now permitted to engage in various activities concerning accounts for Virtual Assets Service Providers, including opening designated accounts, providing settlement services, acting as channels for FX flows and trade, and any other activities approved by the CBN.
The apex bank stressed the importance of adherence to the guidelines, cautioning that non-compliant banks could face sanctions, including the suspension of operating licenses.
These measures, in addition to monetary penalties and the prohibition from opening further designated accounts, underscore the CBN’s commitment to enforcing regulatory compliance in the evolving landscape of virtual assets in Nigeria.
