CBN bans crypto account operators from making cash withdrawals

CBN bans crypto account operators from making cash withdrawals

The Central Bank of Nigeria (CBN) has issued a directive barring cash withdrawals from accounts opened for virtual and digital assets transactions.

Rather, operators of the virtual and digital assets accounts can only make withdrawals from these accounts by transfer or through a manager’s cheque, the apex bank explained in a new ‘Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers’ issued yesterday but dated December 28, 2023.

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 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.”

In its new policy direction, the bank stated that it was more open to the idea of regulation rather than its earlier position of the restriction of crypto assets from the formal banking sector.

The guideline, published alongside the circular, is meant to serve as the framework for the reintroduction of crypto into the formal banking sector.

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.”