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The Central Bank of Nigeria (CBN) has selected a group of fintech and digital asset firms, including Flutterwave, Paystack, KuCoin, cNGN, Juicyway, and KoinKoin, for the initial phase of its pilot supervision programme targeting virtual asset service providers (VASPs).
The initiative is part of the regulator’s broader efforts to strengthen anti-money laundering controls, enhance financial crime prevention, and improve oversight of emerging risks within Nigeria’s digital financial ecosystem.
According to the CBN, the pilot programme is anchored on its enhanced AML/CFT/CPF framework, aligned with key legislations including the Money Laundering (Prevention and Prohibition) Act 2022 and the Banks and Other Financial Institutions Act (BOFIA) 2020. The programme is also consistent with global standards under the Financial Action Task Force (FATF).
Strengthening Regulatory Oversight and Compliance
The apex bank noted that the pilot forms part of a risk-based supervisory approach aimed at improving regulatory compliance, strengthening compliance management systems, and enhancing regulatory monitoring of virtual asset activities.
“This pilot does not replace or override existing regulatory frameworks governing virtual assets in Nigeria, nor does it confer licensing status on participating entities,” the CBN clarified.
Participation in the programme represents a formal supervisory engagement designed to deepen understanding of risks associated with digital assets while promoting stronger compliance frameworks across the sector.
Focus on AML, KYC, and Risk Assessment
Under the pilot, participating firms are required to meet strict compliance requirements, including:
- Submission of monthly AML/CFT/CPF supervisory key performance indicators (KPIs)
- Implementation of robust Know Your Customer (KYC) processes
- Enhanced transaction monitoring and sanctions screening
- Oversight of cross-border transactions and activities
The programme also emphasises compliance with the FATF Travel Rule, requiring firms to demonstrate readiness in sharing transaction data securely to support fraud detection and regulatory reporting.
Additionally, firms will undergo detailed reviews covering governance structures, risk assessment, and internal controls to ensure alignment with evolving global compliance standards.
Collaboration and Data Protection
The CBN disclosed that participants will engage directly with both the regulator and the Nigeria Financial Intelligence Unit as part of the supervisory process. All data submitted will be treated as confidential, in line with the Nigeria Data Protection Act 2023 and established data privacy standards.
Driving RegTech Innovation in Digital Assets
The phased programme is designed to support the development of stronger RegTech solutions, improve compliance automation, and enhance regulatory intelligence within Nigeria’s virtual asset ecosystem.
The CBN confirmed that subsequent phases of the programme are already scheduled, signalling a structured and long-term approach to regulating digital asset activities.
This initiative underscores the regulator’s commitment to fostering innovation while ensuring that fintech and crypto-related services operate within a secure, transparent, and compliant environment.
As virtual assets continue to gain traction, the pilot programme is expected to play a critical role in shaping Nigeria’s regulatory framework, strengthening market integrity, and positioning the country as a leader in compliance technologyand digital financial regulation in Africa.
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