Following the Central Bank of Nigeria’s (CBN) decision to remove restrictions on banks facilitating accounts for virtual assets like cryptocurrencies, a new directive has been issued stipulating that no cash withdrawals will be permitted on accounts associated with virtual assets.
The apex bank published guidelines indicating that accounts linked to virtual assets will not be authorised to issue third-party checks.
Instead, only transfers into other designated accounts will be permitted, as outlined in the guidelines released by the CBN.
The guidelines read in part, “Transactions on virtual assets bank accounts would also be through managers’ checks.”
The guidelines also stipulated that banks are to open special accounts in accordance with the guideline, which shall be solely for the purpose of transactions on virtual and digital assets and not for any other purpose.
Banks and financial institutions shall monitor, on a continuous basis, all activities conducted in designated accounts opened in accordance with these guidelines.
Thus, banks and financial institutions are expected to submit, on a monthly basis, the number of accounts opened, the value and volume of transactions on each account, details of the counterparties to the transactions, the incidence of fraud or theft, the number of customer complaints, and remedial measures taken.
In addition to the aforementioned directives, the guidelines mandate that financial institutions set transaction limits for individual designated accounts according to the maximum transaction charges stipulated in the bank’s guide to charges.
Furthermore, it explicitly prohibits financial institutions from engaging in any concession agreements or arrangements with holders of designated accounts.
Hammering on the need for financial institutions to adhere to its guidelines, the apex bank highlighted that erring banks could get their licences suspended.
The document read in parts, “Notwithstanding the powers of the CBN under the BOFIA 2020 and in addition to the use of remedial measures in these Guidelines, the CBN may take any or all of the following sanctions against a Fl, its board of directors, officers, or staff for failure to comply with any of the requirements of these Guidelines:
“Prohibition from opening any further designated account; monetary penalty not below the sum of N2,000,000.00 against the FIs, members of its board, senior management, and any staff, for any infraction. Suspension of the operating licence of a Fl.”
Under these guidelines, entities including virtual asset service providers, digital asset custodians, digital asset offering platforms, digital asset exchanges, and operators within the virtual and digital assets sector who are licenced by the Securities and Exchange Commission (SEC) are now permitted to establish and manage accounts with financial institutions across Nigeria.
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