Nigeria's central bank has lifted a ban on transacting in cryptocurrencies, while saying globatrends had shown a need to regulate such activities, the bank said in its latest circular.

The Central Bank of Nigeria (CBN) in Feb. 2021 barred banks and financial institutions fromdealing in or facilitating transactions in crypto assets, citing money laundering and terrorismfinancing risks.

Subsequently Nigeria's Securities and Exchange Commission (SEC) in May last yearpublished regulations for digital assets that signalled Africa's most populous country was tryingto find a middle ground between an outright ban on crypto assets and their unregulated use

In a circular dated Dec. 22, the CBN said current trends globally have shown there is a need toregulate the activities of virtual asset service providers (VASPs), which include cryptocurrenciesand crypto assets

The latest guidelines spell out how banks and financial institutions (Fl) should open accountsprovide designated settlement accounts and settlement services and act as channels for forexinflows and trade for firms transacting in crypto assets.

VASPs would need to be licensed by the Nigerian SEC to engage in the crypto business.

"From the commencement of these Regulations, Fl shall not open or permit the operation ofany account by any person or entity to conduct the business of virtual/digital assets unless thataccount is designated for that purpose and opened in line with the requirement of these  Guidelines" the CBN said

But banks were still barred from trading, holding or transacting cryptocurrencies, the CBN said

（Source: Reuters)