CBN Tightens Oversight of Nigeria’s Crypto P2P Transactions

Nigeria’s Central Bank has introduced new rules tightening oversight of cryptocurrency peer-to-peer transactions and expanding compliance obligations for stablecoin issuers.

The framework for non-security virtual assets, released on Thursday evening, requires P2P operators to connect each cryptocurrency transfer with a corresponding naira payment. Naira payments must be routed through banks or payment channels approved by the CBN.

Stricter account and transaction checks

Under the framework, operators must verify traders’ identities and keep records linking payments to the relevant cryptocurrency transfers. Providers must also confirm that the name and Bank Verification Number of the account used for a naira payment match the verified customer on whose behalf the transaction is carried out.

The CBN states: “A provider shall not release or credit a Regulated Token in a P2P transaction unless it has verified that the name and the Bank Verification Number of the account from which the Naira payment was made, or to which it was made, match the verified customer on whose behalf the provider acts.”

Required records include wallet addresses, payment references, transaction values and exchange rates for linked naira payments and digital asset transfers. Operators must identify both parties to a transaction and monitor activity involving third-party accounts, multiple wallets and payments divided into smaller amounts.

Customers will also have to complete applicable identification, verification, due diligence and ongoing monitoring procedures before they can transact through a regulated P2P service.

For qualifying virtual asset transfers of $1,000 or €1,000 or more, including the naira equivalent, operators must obtain sender and recipient information under applicable Travel Rule requirements. Platforms must collect and retain that information whenever both parties are their customers, regardless of the transaction amount.

Approval and foreign-currency stablecoin rules

P2P operators must obtain explicit CBN approval before offering regulated services. Transactions that convert naira to or from foreign-currency stablecoins will require separate CBN approval and must be settled through, or reported to, an authorised foreign-exchange dealer.

The P2P provisions do not cover private transfers between individuals where no intermediary facilitates the transaction.

The framework also gives the CBN authority to set further requirements covering payment-account verification, customer categories, transaction and customer limits, and other controls.

Controls for stablecoin issuers

Regulated stablecoin issuers must build systems that allow wallet addresses or token balances to be frozen following a lawful court order, a regulatory directive or an instruction from the Nigerian Financial Intelligence Unit.

Issuers must also be able to permanently destroy tokens held in frozen or confiscated addresses when legally authorised. Stablecoin smart contracts must support deny-listing and temporary suspension of token transfers during major security incidents.

The framework requires legal authorisation, documented procedures, audit trails and access controls for these enforcement capabilities.

Growing regional use

Blockchain analytics firm Chainalysis, as reported in the source, found that stablecoin transfers through P2P channels in Sub-Saharan Africa increased more than sixfold between 2022 and 2026, reaching $14.6 billion.

P2P platforms allow individuals to trade cryptocurrencies directly while an intermediary facilitates the exchange. Bank transfers are often used to settle these transactions, which have also helped Nigerians access dollar-backed stablecoins for cross-border transactions and foreign-exchange purposes.

The Securities and Exchange Commission announced plans in May 2024 to ban person-to-person crypto trading involving the naira. The source does not establish whether that proposed ban took effect.