CBN ties P2P crypto trades to BVN-verified bank accounts

The Central Bank of Nigeria (CBN) has tightened its regulation of peer-to-peer (P2P) cryptocurrency trading, barring platforms from releasing or crediting regulated tokens unless the names and Bank Verification Numbers (BVNs) on naira payments match those of verified customers.

The requirement is contained in the apex bank’s new regulations on non-security virtual assets, which subject platform-facilitated P2P transactions to licensing, monitoring and reporting requirements.

Under the framework, the CBN will not issue standalone licences for P2P trading. Instead, platforms must first obtain an Other Services Licence, an Other Services Authorisation or an Approval to Extend Permitted Activities before securing express approval from the bank to offer P2P services.

The regulations prohibit firms without the additional approval from operating or presenting themselves as P2P service providers.

However, purely private transactions between individuals are excluded where no third party facilitates, matches or safeguards the trades.

The CBN also prohibited platforms from knowingly allowing third-party, nominee, mule or fictitious accounts to facilitate transactions.

It further directed platforms to establish board-approved criteria for identifying users operating as businesses, taking into account transaction volumes, frequency, number of counterparties and advertised rates.

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Such users will be subjected to enhanced due diligence and transaction limits, while platforms must report them to the CBN.

The identified traders may subsequently be required to obtain the appropriate licence, discontinue their activities or operate as agents of the platforms, depending on the bank’s directives.

On foreign exchange transactions, the regulations prohibit platforms from facilitating conversions between the naira and Class 2 stablecoins, which are referenced to foreign currencies, without express CBN approval.

Where such approval is granted, the naira component of the transaction must be settled through or reported to a designated authorised dealer.

The apex bank stressed that approval to operate P2P services does not create an alternative foreign exchange market.

It also prohibited transaction structuring or splitting through P2P platforms, offshore entities or unhosted wallets to circumvent regulatory limits.

The bank said it could require real-time or near-real-time reporting of transactions and impose restrictions on specific tokens, customers or trading corridors, or withdraw approvals entirely.

Additionally, platforms are required to retain originator and beneficiary information for every transfer, irrespective of the transaction amount.

Cross-border P2P cryptocurrency transactions will also require separate approval from the CBN.