The Central Bank of Nigeria (CBN) has officially launched a pilot program to supervise anti-money laundering (AML) and counter-financing of terrorism (CFT) compliance among virtual asset service providers (VASPs). The initiative aims to align Nigeria with Financial Action Task Force (FATF) Recommendations 15 and 16, specifically the travel rule requiring VASPs to share originator and beneficiary information for transactions.
From Ban to Regulation: A Policy Shift
Only a few years ago, Nigeria's crypto landscape was defined by friction. In February 2021, the CBN effectively barred commercial banks from servicing crypto exchanges. However, following the lifting of that ban in December 2023 and the subsequent enactment of the Investments and Securities Act of 2025, the focus has shifted from exclusion to integration. This pilot represents a critical step toward a regulated digital asset market.
Six Selected Entities: Diverse Mix of Payments and Trading
According to a press release, the CBN handpicked a select group of fintech and crypto entities for the initial phase: Africa Stablecoin Consortium, Flutterwave, Juicyway, Koinkoin, Kucoin, and Paystack. However, the CBN clarified that participation “does not confer any regulatory status, approval, or licensing right.” Instead, it provides a controlled environment for the bank to study business models and operational risks.
Pilot Requirements: Monthly Data Reporting and Audits
Under the pilot, participating VASPs must submit monthly AML/CFT performance data and undergo audits of customer onboarding, sanctions screening, and transaction monitoring. They must also demonstrate credible plans to track cross-border digital asset flows. The CBN stated: “The Pilot is designed to develop a structured understanding of AML/CFT/CPF risks, business models, and operational practices across participating entities.” All collected data will be protected under the Nigeria Data Protection Act of 2023.
Regulatory Impact: Curbing Bad Actors, Stabilizing a Key Market
By bringing exchanges like Kucoin and payment giants like Flutterwave into a formal supervisory loop, the CBN aims to weed out bad actors while ensuring that Nigeria—one of the world’s most active crypto markets—remains a stable node in the global financial system. The CBN has already scheduled subsequent phases, though it confirmed these are not open to external expressions of interest at this time.