Central Bank of Nigeria’s Endorsement of Cryptocurrency Transactions Set to Positively Impact Government Revenue, Say Industry Insiders

Stakeholders in the crypto ecosystem anticipate that the regulation of cryptocurrencies, following the Central Bank of Nigeria’s recent endorsement in a circular released on Friday, will generate new tax revenues for the government. The move by the apex bank to lift the ban on crypto transactions aligns with current global trends. In the circular titled ‘Circular to all banks and other Financial Institutions guidelines on operations of bank accounts for Virtual Assets Service Providers,’ the CBN highlighted the changing stance, citing the need for regulatory frameworks due to global developments and the risks associated with cryptocurrency operations. The new guidelines empower financial institutions to facilitate banking relationships with Virtual Assets Service Providers (VASPs) in Nigeria, superseding previous directives.

Chimezie Chuta, Founder and Coordinator of Blockchain Nigeria User Group, views this regulatory step positively, emphasizing its potential economic benefits. He sees the regulation allowing the government to impose taxes on crypto transactions and provides a sense of direction for regulators and policymakers. However, he notes that compliance conditions for VASPs set by the Securities Exchange Commission need careful consideration.

Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprises, stresses the importance of the Central Bank ensuring a robust regulatory framework to address potential money laundering concerns. The endorsement marks a significant development in the crypto industry, bringing clarity and potential revenue streams for the government through taxation.