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Stakeholders within the cryptocurrency ecosystem have lauded the recent move by the Central Bank of Nigeria (CBN) to lift the ban on crypto transactions, asserting that cryptocurrency regulation could generate new tax revenues for the government.
This follows the issuance of a circular on December 22, 2023, with reference number FPR/DIR/PUB/CIR/002/003, signed by Haruna Mustafa, the Director of the Financial Policy and Regulation Department at the CBN. The circular, titled 'Circular to all banks and other Financial Institutions guidelines on operations of bank accounts for Virtual Assets Service Providers,' rescinded the earlier directive that prohibited banks from engaging with entities dealing in cryptocurrencies.
The CBN attributed its revised stance to evolving global trends and highlighted the need for regulation in response to the inherent money laundering and terrorism financing risks associated with cryptocurrency operations.
Chimezie Chuta, Founder and Coordinator of Blockchain Nigeria User Group, commended the regulatory shift, stating, "Even though this is late, we think it is a step in the right direction as an industry. It is also good for the economy because now that there would be regulation, it means that the government will be able to tax it, and regulators and policymakers will be able to take pride in the fact that they have taken a step in the right direction."
Chuta emphasized the positive impact on the economy, with the potential for taxation and proper oversight by regulators. However, he noted that the new guidelines set conditions for the Securities Exchange Commission to follow for effective operation.
Senator Ihenyen, Lead Partner and Head of Blockchain and Virtual Assets Practice at Infusion Lawyers, expressed the view that by regulating virtual assets instead of resisting them, the CBN and other regulators could ensure the stability and safety of the financial system. He highlighted the importance of consumer protection and investor safety and emphasized that Nigeria, as a leader in crypto adoption in Africa, should not push digital assets underground.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprises, stressed the need for the CBN to establish a robust regulatory framework to address money laundering concerns effectively.
The regulatory shift is seen as a positive step toward integrating cryptocurrencies into the formal financial system, fostering economic growth, and ensuring compliance with relevant standards.
