The Central Bank of Nigeria (CBN) has made an announcement that favors the overall public and the crypto industry in the country.
According to the latest reports, the Nigerian central bank is aiming to introduce new guidelines that would help banks interact with third-party service providers.
The new guidelines are going to promote open banking in Nigeria and provide guidelines that are going to support the advancement of the financial system in Nigeria.
CBN Announces New Guidelines
It was on March 7, when the CBN made an announcement pertaining to the issuance of new guidelines for banking operations in Nigeria.
According to the new guidelines, the banks will be able to work with third-party service providers and share the private data of the customers.
However, the guidelines stress that the sharing of customer permission has to be carried out after acquiring permission/consent from the respective customers.
The Reason Behind the New Guidelines
Nigeria is the largest country in Africa by population and the majority of the public in the country wants to adopt cryptocurrencies. There are many in Africa who do not have any kind of affiliation or link with the traditional financial systems.
This means that many people in Nigeria do not have trust in banking firms. Therefore, they have resorted to third-party service providers in the country that are unregulated and unlicensed.
As these entities are unregulated, there is always a possibility that the public may end up facing huge losses.
It was back in early 2022 when the CBN banned the interaction of banking firms with cryptocurrency entities.
It had revisited an order that was issued by the governor of the CBN back in 2017, where banks were banned from interacting with crypto firms.
After that, the banks stopped interacting with the crypto firms but there was a great level of backlash from the Nigerian public.
Even the Nigerian congress and the parliament had to intervene revealing that they will ensure that they will not let that happen. Instead, they announced that they will come up with new regulations that will help regulate cryptocurrencies in the country.
According to the CBN, they always had the safety and protection of funds of the public in mind when they issued the bans and orders.
As they have recognized the interest of the public in cryptocurrencies, they are aiming to make things more favorable for them.
With the introduction of the new guidelines, the locals will gain access to advanced, useful, and efficient services, and products. This way, the financial system will gain more traction in the Nigerian market as well.
The CBN has also sent a circular to the payment services providers and financial institutions. In the circular, the CBN confirmed that it has a great level of knowledge and understanding of the Application Programming Interface (API).
They know what role the APIs have been playing in payments and financial systems. Therefore, they have added new guidelines that would provide more information and understanding of how to deal with the technology.
Their aim is to enhance the financial institutions’ access to the guidelines so they can work well with third-party service providers.
With the banks adopting the open banking system guidelines accordingly, the security and consistency of the services will be improved tremendously.
They will also provide more security and consistency to the banks, the third-party service providers, and the users throughout the financial industry.
With the adoption of the new guidelines, the banking firms and third-party institutions will be able to work together to offer a bright future to the locals.
The cryptocurrency industry will definitely thrive because exchanges and other crypto firms will be able to interact with Nigerian banking firms.
By working together, they will be able to offer so much to the locals in the country.