Nigeria’s Central Bank mandates bank linkage for all crypto P2P payments
Nigeria’s Central Bank requires all cryptocurrency peer-to-peer transactions to be linked to verified bank payments under new rules.
Nigeria’s Central Bank (CBN) has imposed new regulations requiring all cryptocurrency peer-to-peer (P2P) transactions to be linked to corresponding bank payments. The rules aim to increase oversight of cryptocurrency trading outside traditional exchanges.
Under the new framework for non-security virtual assets, P2P operators must route naira payments through banking or CBN-approved payment channels. They are also required to verify traders’ identities and maintain records tying each payment to its respective cryptocurrency transfer.
The CBN stated that a provider cannot release or credit a regulated token in a P2P transaction unless the name and Bank Verification Number of the bank account involved match the verified customer conducting the transaction. The central bank may also set further requirements on payment verification, customer categories, transaction limits and other controls.
The regulations extend to stablecoin issuers, who must build technical capabilities to freeze wallets, destroy tokens, and block transactions through smart contracts. These measures are intended to prevent money laundering, terrorist financing, and other illicit activities.
P2P trading allows individuals to buy and sell cryptocurrencies directly, often settling payments via bank transfers. This model has grown significantly in Nigeria and across Sub-Saharan Africa, with stablecoin transfers through P2P channels reaching $14.6 billion between 2022 and 2026, according to Chainalysis.
The CBN’s framework requires P2P providers to identify both parties in a transaction, monitor suspicious activities such as the use of third-party accounts or multiple wallets, and maintain detailed records including wallet addresses, payment references, transaction values, and exchange rates.
Transactions involving conversion between naira and foreign-currency stablecoins require CBN approval and must be settled through authorised foreign exchange dealers.
The new rules implement international anti-money laundering standards, including the Financial Action Task Force’s Travel Rule, which mandates identification of senders and recipients for qualifying transfers.
These measures deepen regulatory control over cryptocurrency payments in Nigeria, linking digital asset transactions to identifiable customers and regulated financial institutions. They also increase compliance demands on P2P platforms and stablecoin issuers operating in the country.
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Source: TechCabal
