What Crypto Activities Will the CBN Allow Licensed Fintechs to Do?

Fintech operators want the CBN to define what crypto activities are permitted for licensed institutions.

In Nigeria’s digital finance market, the biggest crypto question is no longer “should we regulate?” It’s “what, exactly, is allowed?”

The request is captured in feedback from the CBN’s newly released Fintech Report, which drew on surveys, workshops and industry roundtables.

In the Fintech Report feedback, stakeholders broadly recommend a risk-based, activity-focused framework,one that clearly separates lower-risk use cases from higher-risk ones, while still protecting consumers and the financial system.

And that’s where the current regulatory tension sits: policy signals exist, but operators say enforceable detail is still thin.

What is already “permitted” today (and what it actually covers)

Nigeria already has an important building block: the CBN’s December 22, 2023 Guidelines on how banks and other financial institutions can operate accounts for virtual asset service providers.

Those guidelines do not read like a greenlight for banks and fintechs to freely run crypto products. What they do is define how regulated financial institutions can provide banking rails to SEC-licensed virtual asset businesses—under controlled conditions.

Here are the clearest allowances and constraints:

1) Designated accounts and settlement services (banking rails)

The guidelines permit financial institutions to open designated accounts, provide designated settlement accounts and settlement services, and act as channels for certain flows as allowed by the CBN.

But the document is explicit that these accounts must be designated for virtual/digital asset activity and opened under the guideline’s requirements.

2) SEC licence as a gatekeeper

A key compliance gate: an applicant must show evidence of a valid licence issued by the Securities and Exchange Commission (Nigeria) to engage in virtual asset/digital asset business to open such designated accounts.

This is a big tell: the CBN’s framework expects SEC licensing to be central to which crypto entities get access to regulated banking services.

3) Tight restrictions on account use

The guidelines also impose strong controls, including:

• The designated account should be used only for virtual/digital asset transactions
  
• No cash withdrawals from the account
  
• Ongoing monitoring and monthly reporting requirements to the CBN
  
• Operational limits set by banks based on risk assessment

4) Naïra-centric settlement logic

The guidelines describe settlement mechanics that warehouse naira positions and restrict how settlement accounts should operate, including limits and transaction visibility requirements for the bank.

Bottom line: What is “permitted” today is largely about banking access and settlement control, not a full menu of crypto services that licensed fintechs can build and distribute to customers. That is the gap the industry wants closed.

What fintechs want clarified next: the real “permissible activities” list

In the Fintech Report feedback referenced by Nairametrics, stakeholders specifically ask regulators to clarify which crypto-related activities licensed institutions can engage in—citing examples such as custody, tokenisation, and stablecoins.

That list matters because each activity carries different risk and requires different controls.

Custody

Custody is about safeguarding clients’ digital assets and controlling private keys (directly or via secure infrastructure). It raises questions that regulators typically care about:

• asset segregation and safeguarding
  
• cybersecurity and operational resilience
  
• dispute resolution and complaint handling
  
• capital and insurance expectations

Tokenisation

Tokenisation can mean many things,from tokenised real-world assets to on-chain representations of claims or securities. The legal questions often become:

• is the token a security?
  
• who is the issuer and what disclosures are required?
  
• can regulated firms distribute, trade, or custody it?

Stablecoins

Stablecoins are where payments, monetary policy and consumer risk meet head-on. Questions regulators need to answer include:

• what qualifies as a stablecoin (fiat-backed, commodity-backed, algorithmic)?
  
• reserve requirements and audit expectations
  
• redemption rights and consumer protection
  
• whether stablecoins can be used for settlement and payments, and under what limits
  

Fintechs also want clearer advisories focused on consumer protection,especially around volatility and fraud,rather than a regime that treats every crypto-related activity as inherently criminal.