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Nigeria’s Central Bank, on 22 December 2023, issued the Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers. CBN revised its prohibitions against its supervised financial institutions from serving digital financial consumers who deal in virtual and digital assets.


The Guidelines (the “CBN VASP Guidelines”) apply to financial institutions regulated by the Central Bank of Nigeria (the “CBN”).

The CBN Act 2007 and Banks and Other Financial Institutions Act (BOFIA) 2020 empowered the CBN to issue the CBN VASP Guidelines that regulate how financial institutions relate with Virtual Assets Service Providers (“VASP”) in Nigeria.

The CBN VASP Guidelines aim to provide minimum standards and requirements for banking business relationships and account opening for VASPs, effective monitoring of VASP activities, operations of VASPs’ accounts, and risk management.

Moreover, the CBN VASP Guidelines apply to banks and payment Service Providers that provide settlements, payment processing, or switching.

It complements the Money Laundering (Prevention and Prohibition) Anti-Money Laundering, Combating the Financing of Terrorism, and Customer Due Diligence Regulations.

In addition to the Securities and Exchange Commission’s (“SEC”) New Rules on Issuance, Offering Platforms and Custody of Digital Assets. SEC is the sole and exclusive regulator of VASPs in Nigeria.

We submit that the CBN VASP Guidelines, in line with the FATF (Financial Action Task Force) Recommendation 15, did not recognize digital tokens and cryptocurrency as a currency in Nigeria. Cryptocurrency is a form of digital or virtual assets.

Our commentary is limited to designated settlement accounts under the Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers, 2023.

Virtual Assets. What does it mean?

Virtual Assets are digital representations of value that are transferred, digitally traded, and used for payment or investment purposes. It shall not include digital representations of fiat currencies, securities, and other financial assets that are already covered elsewhere in the FATF recommendations.[1].

FATF Recommendations 15 encourages countries to consider virtual assets as “property,” “proceeds,” “funds,” “funds or other assets,” or other “corresponding value.” Countries should apply the relevant measures under the FATF Recommendations to virtual assets and Virtual Asset Service Providers (VASPs).

Nigeria’s Money Laundering Act 2022 is the first legislative recognition of virtual assets in Nigeria, and it enabled the CBN to revise its earlier prohibition of banking services for VASPs.

SEC’s New Rules on Issuance, Offering Platforms and Custody of Digital Assets, 2022, described digital assets as digital tokens representing assets such as a debt or equity claim on the issuer.

Nigerian legislation on digital assets includes the CBN VASP Guidelines 2023, SEC’s New Rules on Issuance, Offering Platforms and Custody of Digital Assets, 2022, Money Laundering (Prohibition and Prevention) Act 2022, CBN’s Anti-Money Laundering Regulations 2022, and existing customer due diligence frameworks.

Stakeholders of Digital Assets

The CBN VASP Guidelines recommend the following as eligible stakeholders:

  • Commercial and Merchant banks
  • Payment Solution Service Providers (restricted to those that are involved in settlement for third parties)
  • Virtual Assets Service Providers (serves customers by providing safekeeping, administration, or exchange or transfer of virtual assets and fiat currencies).
  • Digital Asset Custodian (provides the services of safekeeping, storing, holding, or maintaining custody of virtual assets/digital tokens for another person’s account).
  • Digital Asset Exchange (an electronic platform that facilitates the trading of a virtual asset or digital Asset).
  • Digital Asset Offering Platform (electronic platform operated for offering digital assets).
  • DAX Operator (operates a digital assets exchange).

Financial Institutions under the CBN VASP Guidelines may serve VASPs by opening designated accounts, providing settlement services on the designated settlement accounts, and acting as channels for FX flows and trade.

We note that no VASPs may operate any other bank account except a designated account approved by the financial institution’s senior management from the rank of Assistant General Manager.

Restrictions on VASPs’ Accounts

The restrictions on VASPs’ accounts under the CBN VASP Guidelines are like those on PSSP (Payment Service Solution Providers) and MMOs’ (Mobile Money Operators) Settlement Accounts under the CBN’s Guidelines on Mobile Money Services in Nigeria 2021.

The VASP Designated Settlement Account is not yet insured under the Nigerian Deposit Insurance Corporation’s (“NDIC”) Framework for establishing Pass-Through Deposit Insurance for Subscribers of Mobile Money Operators in Nigeria or any similar insurance.

Furthermore, financial institutions must open a VASP-designated account strictly under the CBN VASP Guidelines. No cash withdrawal shall be allowed on the VASP account.

Similarly, there is no clearing of third-party cheques. Withdrawal from a VASP-designated account is through a manager’s Cheque or transfer to bank accounts or wallets.

Financial institutions enjoy the prudential measure of establishing transaction limits on Designated Accounts. Allowing financial institutions this privilege may be ineffective because the market forces may determine the upper threshold and increase money laundering exposures.

Designated Settlement Accounts

CBN must authorize the opening and operation of Designated Settlement Accounts in Nigeria.

Following opening a VASP VASP-designated settlement Account, the financial institution must settle all VASP or Digital Assets transactions into the designated accounts.

Settlement in the Designated Settlement Account is only for the VASP or Digital Assets customers and in Naira. A designated Settlement Account does not yield interest.

All available electronic payment features apply to the Designated Settlement Account (“DSA”). Every credit to the DSA is for funding Naira positions of the VASP/DAs platform’s customers.

To reduce money laundering, every debit from a DSA shall only be in favour of the specific accounts used to fund the Naira position on the VASP/DAs platform.

DSA increases financial institutions’ compliance obligation by returning the DSA’s financial transaction data to the CBN monthly.

A DSA cannot facilitate foreign exchange positions of persons on the VASP/DAs Platform.

Like the Settlement Accounts of some Fintech, the DSA is a collateralized bank account, not less than 150% of the VASP’s highest net debit position in any previous ten days.

You cannot use a DSA for credit assessment or advancement. The settlement cycle for VASP or digital assets transactions is T+3 (transaction n date plus three days).

Financial institutions must not pay out from a DSA before the end of the T+3 cycle or facilitate transfer and settlement from the FX positions of persons on the VASP/Das platform to any foreign account.

Transfers from the Naira position of persons on the VASP platform into their bank account shall be at most twice in a quarter.

The customer due diligence regime for DSA is strict, given its potential for money laundering. xvii. The Nigerian Uniform Bank Account Number Standards (NUBAN) framework does not apply to the DSA.


Although s.30 of the Money Laundering Act 2022 recognizes VASPs as a financial institution, SEC’s New Rules on Issuance, Offering Platforms and Custody of Digital Assets, 2022, defined digital assets to include debt or equity claim on the issuer.

We submit that the CBN ceded its sector-specific regulator’s role of VASPs and digital assets, given the broad definition of other financial institutions under BOFIA 2020.

We share in the aspiration of the Nigerian Central Bank while trusting the financial institutions to uphold the anti-money laundering regimes to reduce the risks that may arise from digital assets operations that include digital tokens.

[1] Regulations 4.0, Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers, 2023

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