In a major development for the Nigerian crypto industry, the central bank of Nigeria (CBN) has reversed its earlier decision to ban banks and financial institutions from facilitating Bitcoin and other crypto transactions.
The CBN issued a circular on December 22, 2023, stating that it has reviewed its stance on crypto regulation and has decided to allow banks to provide services to crypto exchanges and users, subject to certain guidelines and standards.
The circular noted that the CBN recognizes the potential of crypto assets to enhance financial inclusion, innovation and economic development in Nigeria, as well as the risks and challenges associated with them. Therefore, the CBN has decided to adopt a balanced and pragmatic approach to crypto regulation, rather than a blanket prohibition.
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According to the circular, banks that wish to offer crypto-related services must obtain a license from the CBN and comply with the existing anti-money laundering, counter-terrorism financing and consumer protection regulations. Banks must also ensure that they have adequate systems and controls to monitor and report crypto transactions, as well as to safeguard their customers’ funds and data.
The CBN also stated that it will continue to monitor the developments in the global and local crypto markets and will issue further guidance and regulations as necessary. The CBN urged the public to exercise caution and due diligence when dealing with crypto assets, as they are volatile and risky.
The reversal of the CBN’s ban on crypto transactions is a welcome news for the Nigerian crypto community, which has been one of the most active and vibrant in Africa. According to a report by Chainalysis, Nigeria ranked third in the world in terms of crypto adoption in 2021, behind only Vietnam and India. The report also estimated that Nigerians traded over $400 million worth of crypto in 2021, up from $281 million in 2020.
The lifting of the ban is expected to boost the growth and innovation of the Nigerian crypto industry, as well as attract more investors and entrepreneurs to the sector. Some of the leading Nigerian crypto platforms, such as BuyCoins, Bundle, Quidax and Luno, have expressed their optimism and readiness to work with the CBN and the banks to provide safe and reliable crypto services to their customers.
The Nigerian crypto industry has also received support from some influential figures, such as Jack Dorsey, the CEO of Twitter and Square, who visited Nigeria in 2019 and announced his plans to establish a Bitcoin development center in Africa. Dorsey has been a vocal advocate of Bitcoin and has recently launched a new company called Square Crypto, which aims to build an open-source platform for Bitcoin and other decentralized technologies.
The CBN’s decision to allow banks to facilitate crypto transactions is a significant step forward for the Nigerian crypto industry and a positive sign for the future of crypto regulation in Africa. It is hoped that other African countries will follow suit and adopt a more progressive and supportive stance towards crypto assets, which have the potential to transform the continent’s economy and society.
Coinbase to operate Bitcoin and crypto exchange in France
Coinbase, the largest cryptocurrency exchange in the US, has obtained a licence from the French financial regulator to operate as a digital asset service provider in the country. This is a significant milestone for the company, which aims to expand its presence in Europe and offer more services to its customers.
According to CNBC, Coinbase is one of the first platforms to receive the licence from the Autorité des Marchés Financiers (AMF), which oversees the regulation of financial markets and securities in France. The licence allows Coinbase to provide custody, trading and exchange services for cryptocurrencies and other digital assets, such as stablecoins and non-fungible tokens (NFTs).
Coinbase said that the licence will enable it to comply with the European Union’s Fifth Anti-Money Laundering Directive (AMLD5), which sets out rules for preventing money laundering and terrorist financing through crypto transactions. The company also said that it will work closely with the AMF and other regulators to ensure that it meets the highest standards of consumer protection, security and transparency.
“We are proud to be one of the first companies to receive this licence from the AMF, which is a testament to our commitment to compliance and innovation in the crypto space,” said Marcus Hughes, Coinbase’s managing director for Europe, Middle East and Africa, in a statement. “France is a key market for Coinbase and we look forward to offering more products and services to our French customers, as well as supporting the growth of the local crypto ecosystem.”
Coinbase’s licence comes amid a growing interest in cryptocurrencies and digital assets in France and across Europe. According to a recent report by Chainalysis, a blockchain analytics firm, France ranked fifth in terms of crypto adoption among 154 countries in 2021, up from 23rd in 2020. The report also found that Europe accounted for 25% of global crypto transactions in the first half of 2021, second only to Asia.
Coinbase, which went public on the Nasdaq stock exchange in April, has been expanding its operations and offerings in Europe in recent months. In October, the company launched Coinbase NFT, a platform that allows users to create, buy and sell NFTs, which are unique digital tokens that represent ownership of various forms of online content, such as art, music and games. Coinbase said that more than 2 million users have signed up for the waitlist for Coinbase NFT, which will initially support Ethereum-based NFTs.
In November, Coinbase also announced that it will launch a crypto-backed debit card in Europe early next year, which will allow users to spend their crypto balances at millions of merchants worldwide. The card will also offer rewards in cryptocurrencies, such as Bitcoin and Ethereum, for every purchase made. Coinbase said that the card will be available in 10 European countries at launch, including France, Germany, Spain and Italy.
Coinbase’s licence from the AMF is expected to boost its competitive edge in the European market, where it faces competition from other crypto platforms, such as Binance, Kraken and Bitstamp. The company said that it currently serves more than 73 million verified users across over 100 countries, and that it processed more than $462 billion in trading volume in the third quarter of 2023.