The recent decision by the Central Bank of Nigeria (CBN) to lift the ban on cryptocurrency transactions is expected to boost economic growth, according to Ayotunde Bally, the CEO of fintech company Arvofinance.
Bally expressed relief at the CBN’s reversal of the cryptocurrency trading ban, noting that embracing such technologies could give Nigerians more financial opportunities and contribute to economic growth.
Bally emphasized the importance of robust regulatory frameworks to ensure sustainability and investor confidence. While welcoming the positive move, he stressed the need for responsible and well-regulated implementation.
In February 2021, the CBN directed all banks to stop transacting with entities dealing in cryptocurrency and to close accounts associated with cryptocurrency transactions.
The directive was based on concerns related to money laundering, terrorist financing, and the lack of laws and consumer protection safeguards in the cryptocurrency space.
The recent circular from the CBN, dated December 22, 2023, lifted the ban on cryptocurrency transactions and provided guidelines for the operations of bank accounts for Virtual Assets Service Providers (VASPs). This move signifies a shift in the regulatory stance towards cryptocurrencies in Nigeria.
The CBN’s decision is seen as a step towards finding a balance between restricting the risks associated with cryptocurrencies and allowing their regulated use.
Experts say the lifting of the ban aligns with the broader regulatory efforts in Nigeria, including the release of regulations on digital assets by the Securities and Exchange Commission (SEC) in May 2023.
As Nigeria explores the potential of digital assets and cryptocurrencies, regulatory clarity and responsible implementation are expected to be crucial in ensuring a balanced and secure financial ecosystem.
