The Central Bank of Nigeria has instituted new restrictions on cryptocurrency transactions, as revealed in recent guidelines pertaining to the operation of cryptocurrency accounts, termed Virtual Assets Service Providers. 

The guidelines, posted on the CBN’s website, specify that cryptocurrency accounts are exclusively designated for virtual/digital assets and must not be utilized for any other purposes.

The CBN has explicitly stated that cash withdrawals from cryptocurrency accounts are prohibited, and third-party cheques will not be cleared. 

According to the guidelines, “An account opened by these Guidelines shall only be used for transactions on virtual/digital assets and not for any other purpose. No cash withdrawal shall be allowed from the account. No third-party cheque shall be cleared.”

Furthermore, the document outlines that withdrawals from cryptocurrency accounts, except for settling virtual/digital assets transactions, can only be conducted through a manager’s cheque or transfer to another designated account.

In response to the global trends in regulating virtual asset service providers, the CBN emphasized the need for oversight. The guidelines state, “Current trends globally have shown a need to regulate the activities of virtual asset service providers, which include cryptocurrencies and crypto assets.”

The move to implement stricter guidelines comes after the CBN lifted the ban on cryptocurrency in December 2023. 

This decision places Nigeria among other African nations, such as South Africa and Botswana, that have opted for regulatory measures to address potential fraud risks associated with the cryptocurrency market.