CBN urged to review anti-crypto directive in banking system

The Central Bank of Nigeria (CBN) has been urged to re-evaluate its current anti-crypto directive banning commercial banks and other financial institutions from handling related transactions.

It is also urged to focus on efficient and effective transaction monitoring and reporting system instead of outright prohibitions.

The position was advanced at the second yearly Blockchain Associations Forum’s (BAF) Member Summit held virtually, which had over 53 countries present.

The summit was held to debate crypto asset policies, national digital asset strategies and the future of the global economy.

Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), a founding member of BAF, represented Nigeria. The Presiden of SiBAN, Senator Ihenyen, stated that the CBN’s directive stopping financial institutions from facilitating cryptocurrency transactions impairs the work of law enforcement agencies concerning the investigation and prosecution of crypto-related crimes in the country, since Nigerian regulators, particularly the CBN, is yet to provide or implement a regulatory framework on crypto assets or cryptocurrencies.

He said that regulators and government need to improve on multi-stakeholder engagements, especially in the crypto asset industry to ensure proper development of policies and regulations in the crypto assets sector, as well as help encourage compliance and cooperation, while boosting trust between operators and regulators.

He called for the review of the National Blockchain Adoption Strategy to ensure that all stakeholders identified under the framework, including the CBN, are on one page.

He added that a review would promote consistency, certainty in crypto assets policy and regulation, as well as promote innovation support and development.

Recounting the improvements in the digital assets sector in Nigeria, Ihenyen noted that the Securities and Exchange Commission (SEC) now recognises crypto asset players under its new regulations on digital assets, which include, Digital Asset Offering Platforms (DAOPs), Digital Asset Custodians (DACs), Virtual Assets Service Providers (VASPs), and Digital Assets Exchange (DAX).

He also noted that the nation has a National Blockchain Adoption Strategy, championed by the National Information Technology Development Agency (NITDA) and supported by the Federal Ministry of Communications and the Digital Economy.

“Nigeria is targeting to realise up to $10 billion from the Blockchain technology by 2030. SiBAN is recognised as a stakeholder in the National Blockchain Adoption Strategy,” he said.

According to him, Nigerian Financial Intelligence Unit (NFIU) now recognises crypto assets as a financial innovation that must be regulated to ensureto ensure accountability and transparency. Nigeria has also enacted a new Money Laundering Act 2022 to, amongst other things, bring virtual assets within its Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework to be compliant with Financial Action Task Force (FATF) standards on AML for crypto assets.

He however noted that though Nigeria has a National Blockchain Adoption Strategy, there is an obvious lack of collaboration amongst stakeholders, particularly amongst regulators, including the Central Bank of Nigeria (CBN), the SEC, and other key regulators, which have impacted negatively on innovation development, policy formulation, and regulation in Nigeria’s emerging crypto assets industry.