The Central Bank of Nigeria (CBN) has introduced a new supervisory initiative aimed at strengthening oversight within the country’s rapidly evolving virtual asset sector.
The regulator has officially launched an Anti-Money Laundering, Counter-Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) supervision pilot involving a select group of Virtual Asset Service Providers (VASPs). The move reflects a broader effort to enhance the integrity of Nigeria’s financial system as digital asset adoption continues to grow.
The pilot is structured as a risk-based supervisory programme, with the CBN making it clear that participation does not grant any form of regulatory approval or licensing status. Instead, it is designed strictly as a monitoring and assessment exercise.
According to the CBN, the initiative will provide deeper insight into the operational models, risk exposure, and compliance capabilities of virtual asset operators. Participating entities will be required to submit monthly supervisory Key Performance Indicators (KPIs) using a standardized reporting template, while also undergoing detailed reviews of their governance structures, customer onboarding processes, sanctions screening systems, transaction monitoring frameworks, and cross-border activities.
A key focus of the programme is the implementation of the Financial Action Task Force (FATF) Travel Rule, a global standard aimed at improving transparency in digital asset transactions.
The initial phase of the pilot includes six selected entities: cNGN, Flutterwave, Juicyway, KoinKoin, KuCoin, and Paystack. The inclusion of both local and international players highlights the CBN’s intention to adopt a collaborative approach to regulation, balancing innovation with compliance and financial stability.
Announced on March 31, 2026, the initiative is supported by existing legal frameworks, including the Money Laundering (Prevention and Prohibition) Act 2022 and the Banks and Other Financial Institutions Act (BOFIA) 2020. The CBN also confirmed that all data submitted during the pilot will be treated as confidential supervisory information and handled in line with the Nigeria Data Protection Act 2023.
This development comes at a critical time for Nigeria’s financial ecosystem, as concerns continue to grow around the misuse of digital channels for financial crime. Recent warnings from lawmakers regarding the rise in Point of Sale (POS) fraud and the spread of unlicensed cryptocurrency services have further underscored the need for stronger oversight.
By transitioning to a structured, risk-based supervisory model, the CBN aims to support responsible innovation while ensuring that virtual assets do not become avenues for illicit financial activities. The initiative is also expected to contribute to building greater trust in Nigeria’s digital financial ecosystem and improving its global competitiveness.
The pilot represents the first phase of a broader regulatory roadmap, with additional phases already planned, although they are not currently open to new participants.
