The Central Bank of Nigeria this week announced a group of virtual asset service providers, including cNGN (a regulated, blockchain-based stablecoin pegged 1:1 to the Nigerian Naira), Flutterwave, Juicyway, KoinKoin, KuCoin and Paystack, for a new pilot supervision programme aimed at strengthening oversight around anti-money laundering and counter-terrorism financing risks linked to digital asset activities.
Rather than introducing another ban or sweeping restriction, the regulator is choosing deeper engagement. The focus now is on supervision, compliance and understanding how crypto-related operations fit into Nigeria’s broader financial system.
In its statement, the bank regulator explained that “Participation in the Pilot reflects a formal supervisory invitation to engage with the CBN in a controlled and structured environment, enabling participating entities to contribute insights that support the CBN’s AML/CFT/CPF, financial system stability, and market integrity oversight of virtual asset-related activities within its mandate." The regulator says it wants to sit closer to these firms, observe how they operate and ensure they are meeting strict standards against money laundering and terrorism financing.
Jemi Motesho
What the CBN’s Virtual Asset Pilot Really Means
It is important to be clear about what this pilot is and what it is not. The CBN stressed that participation does not mean these companies have received a new crypto licence. It also does not replace the role of other regulators like the Securities and Exchange Commission, which has already introduced its own framework for digital assets.
Instead, this is about supervision. The selected firms will submit monthly reports that show how they are handling compliance. They will engage directly with the CBN and the Nigeria Financial Intelligence Unit. They will also go through reviews that look at how they onboard customers, screen for sanctions, monitor transactions and manage cross-border payments.
The regulator also made it clear that the pilot supports global standards set by the Financial Action Task Force, especially Recommendations 15 and 16. That includes the so-called Travel Rule, which requires virtual asset companies to share certain information when transferring funds, just like banks do. This has been hailed by advocates as a guardrail to ensure crypto transactions are not used to hide illegal activity.
The CBN says all information shared during the programme will be treated as confidential, in line with Nigeria’s Data Protection Act 2023. It also noted that later phases of the programme are already scheduled and are not open for applications.
Nigeria’s Complicated Crypto Timeline
To understand why this matters, we need to look back. In 2021, the CBN issued a circular that barred banks and other financial institutions from facilitating crypto transactions. That decision forced many crypto businesses to operate in a grey zone, relying heavily on peer-to-peer channels. At the time, the CBN said the risks around money laundering and fraud were too high.
Meanwhile, crypto adoption in Nigeria kept rising. Reports from blockchain analytics firms like Chainalysis consistently ranked Nigeria among the top countries globally for crypto usage, especially for peer-to-peer trading. Young Nigerians turned to digital assets for remittances, savings, and even as a hedge against currency volatility.
By late 2023, the tone began to shift. The CBN lifted its earlier restriction on banks, allowing them to provide services to virtual asset service providers under strict conditions. Around the same period, the Securities and Exchange Commission updated its rules on digital assets and introduced a clearer licensing pathway for crypto platforms.
The new pilot programme now looks like the next step in that gradual shift from outright restriction to structured oversight.
Nigeria remains one of the most active crypto markets in the world. That reality has not changed. What is changing is how the country chooses to manage it. This pilot does not solve every regulatory question, but it shows that the conversation has moved from restriction to supervision.
Louis Eriakha
