Nigeria’s Crypto Watchdog: Six Firms Under the Microscope

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Key Highlights

  • In a sober week, the Central Bank of Nigeria launches a pilot to supervise six crypto firms-like a hospital orderly counting patient charts rather than opening doors to risk.
  • The aim is plain and heavy: curb money laundering and watch how firms verify customers and transactions; a test of character, not of courage.
  • Joining does not grant a license; firms must submit monthly reports, as if they were children sent to present their homework to a stern and punctual aunt.

The Central Bank of Nigeria (CBN) has begun a pilot program this week to supervise virtual asset service providers (VASPs), trying to reduce the risk of money laundering and to counter terrorism financing in the country. A city of clerks and telephones seems to lean closer as the announcement lands on the desk like a damp envelope.

According to the official release, authorities have selected companies for the program, including cNGN (a stablecoin pegged to the Naira), Flutterwave, Juicyway, KoinKoin, KuCoin, and Paystack. A curious assortment, one might say, like a travellers’ procession through a provincial fair, each with its own badge and small dream of speed and legality.

The program is expected to follow rules from the Financial Action Task Force (FATF), including the Travel Rule, which requires companies to share information about who sends and receives money when transferring digital assets. The rule reads like a letter from a stern aunt: you tell us where you came from and where you intend to go, and we will take notes in neat columns.

How the pilot works

The CBN said the pilot does not grant a new license or regulatory approval. Instead, it is a way to observe how they operate, improve their rules and processes, and make sure they follow laws. It is not a coronation; it is a rehearsal for the actors, with the audience on a coffee break.

“This pilot does not alter, replace or supersede the existing regulatory framework governing virtual assets in Nigeria or the mandates of other competent authorities,” the bank said.

Participating firms are required to submit monthly reports to show how they manage their customer onboarding and look for suspicious activity. The banks also said they would track transactions and manage payments that cross borders. It is all very meticulous, which is to say it could be a long winter for anyone hoping for a simple transfer.

In addition, firms are required to work closely with the CBN and the Nigeria Financial Intelligence Unit (NFIU). The bank stated that all data collected will be treated as confidential, in line with the Nigeria Data Protection Act 2023. The phrase confidential rings through the rooms like a bell that costs a penny more every time it is rung.

Nigeria’s history with cryptocurrency

The pilot is the next step in Nigeria’s evolving approach to digital assets. In 2021, the CBN issued a circular preventing banks and financial institutions from providing services to crypto exchanges, citing risks of fraud and money laundering. A decree as abrupt as a gust of wind through a half-open window.

As a result, many crypto firms relied on direct person-to-person trading. Yet, Nigeria grew to be among the world’s most active markets for digital assets, with people using crypto to send remittance funds, save, and shield their money from inflation. A merry little rebellion-quiet, stubborn, and perfectly Nigerian.

By late 2023, the CBN lifted the restriction and allowed banks to support crypto trading, but under strict conditions. Around that same time, the Securities and Exchange Commission (SEC) introduced rules and licensing pathways for digital asset platforms. The playbill began to resemble a long, expensive play where every actor wants a say and a badge.

The new pilot reflects a move toward closer supervision rather than outright restrictions, allowing regulators to work directly with firms while enforcing compliance standards. A compromise, perhaps; not a door, but a window through which regulation peers at its own reflection.

The CBN said the program will run in phases, with later stages already planned and not open to new participants. The theatre is set; only those on the list will have seats, and even those seats might be moved to a different row as the director whispers for order.

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2026-04-02 20:21