CBN Issues Notice, Refraining The Withdrawal of Cash From Accounts Opened For Crypto Transactions
The Central Bank of Nigeria in a regulatory twist, has issued a notice, refraining cash withdrawals, from accounts opened for virtual and digital assets transactions.
The Apex bank in a new ‘Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers’, disclosed that Withdrawals from these accounts will only be possible by transfer or through a manager’s cheque.
According to the bank, an account opened under its new guidelines will only be used for transactions on virtual/digital assets and not for any other purpose.
The guideline reads in part,
“No cash withdrawal shall be allowed from the account. No third-party cheque shall be cleared from the account. Except for settlement of a virtual/digital assets transaction which shall be done through a transfer to another designated account, the withdrawal shall be only through a managers’ cheque or transfer to an account.”
Commenting on the guideline, the CBN said, the Guidelines shall apply to banks and other financial institutions under the regulatory purview of the CBN.
Part of the objectives read, “Provide minimum standards and requirements for banking business relationships and account opening for Virtual Assets Service Providers in Nigeria.”
Speaking on how virtual asset providers can open accounts, the apex bank noted,
“From the commencement of these Regulations, financial institutions shall not open or permit the operation of any account by any person or entity to conduct the business of virtual/digital assets unless that account is designated for that purpose and opened in line with the requirement of these Guidelines. The designated account shall only be opened with the approval of senior management of the FI.”
The new CBN guideline further provides an extensive list of other requirements aimed at protecting the financial system and customers from uncertainty and fraud risks.
The guideline is coming after the Apex bank last year December, lifted the restriction on banks from facilitating crypto transactions.
According to the circular issued to commercial banks and other financial institutions in the country, the CBN saidtm the ban was lifted because current global trends have shown that there’s a need to regulate the activities of crypto companies.
Following the ease of ban, Banks are now allowed to open bank accounts for crypto companies, also referred to as VASPs, provide them with designated settlement accounts, and act as channels for FX flows and trade.
Notably, the CBN’s recently issued guidelines for virtual assets signify a critical step in developing a regulated digital finance landscape.
Meanwhile, despite these advancements as regards crypto transactions, there are concerns about the volatility and security risks associated with cryptocurrencies, underscoring the need for ongoing vigilance and robust regulatory oversight.
