CBN Gives Instruction To Access, UBA, Zenith Others on Crypto Bank Accounts, Stops Cash Withdrawals

• The CBN has released guidelines on how cryptocurrency transactions will work in Nigeria's financial system
• One of the instructions is for banks not to allow cash withdrawal on bank accounts linked to cryptocurrency
• There is a penalty of N2 million and license revocation for any bank that refuses to comply with the guidelines

The Central Bank of Nigeria has banned cash withdrawals from virtual and digital asset transactions.

This was disclosed in a new document posted on the CBN website titled 'Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers.'

According to the apex bank, an account opened for virtual assets will only be used for transactions involving virtual/digital assets and not for any other purpose.

CBN also said withdrawals from these accounts will only be possible by transfer or through a manager's cheque

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The guidelines read 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.”

Details of CBN guidelines on banks

In the guideline, the CBN also provided steps on opening bank accounts and the documents required, Punch reports

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.

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“The designated account shall only be opened with the approval of senior management of the FI.”

There are other instructions for virtual asset providers in the guideline, including penalty if banks fail to comply.

“Prohibition from opening any further designated account; Monetary penalty not below the sum of 2,000,00O.00 against the FIs, members of its board, senior management, and any staff, for any infraction. Suspension of the operating licence of a Fl.”

Nigerian banks fintech companies move to develop new crypto

In an earlier report, Legit.ng revealed that the CBN developed a guideline for cryptocurrency trading by Nigerian banks.

The development comes as a consortium of Nigerian banks and fintech firms partner to develop a new stablecoin.

The new stablecoin, cNGN, is backed by the Nigerian currency and designed to benefit token holders.

Source: Legit.ng