CBN Prohibits Crypto Bank Account Holders From Cash Withdrawal

By Modupe Gbadeyanka

The Central Bank of Nigeria (CBN) has directed financial institutions in the country not to allow holders of crypto bank accounts to withdraw cash or issue a third-party cheque.

“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,” the CBN said in its new Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers.

Recall that last month, the central bank lifted the ban on cryptocurrency transactions through banks in the country after over two years.

The ban on virtual and digital asset transactions was announced in February 2021, after some youths largely funded a nationwide mass protest in the country in October 2020 through cryptocurrencies.

After the CBN action in 2021, crypto traders in Nigeria switched to peer-to-peer (P2P) trading through recognised cryptocurrency exchanges like Binance and others.

However, the lifting of the barrier, according to the central bank, was done because “Nigeria can no longer afford to keep pushing digital assets underground, for obvious economic and security reasons, especially when you are number one in crypto adoption in Africa and a leading market in the globe.”

It has agreed to allow Nigerians to play big in the crypto market under some guidelines.

It said, “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.

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