The Central Bank of Nigeria (CBN) has launched a supervisory pilot programme targeting Virtual Asset Service Providers (VASPs) as part of efforts to curb financial crime risks and strengthen oversight in Nigeria’s fast-evolving digital asset ecosystem.
The initiative focuses on Anti-Money Laundering, Counter-Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) compliance, marking a shift toward a more structured and risk-based approach to monitoring virtual asset activities within the financial system.
In a statement dated March 31, 2026, the apex bank said the pilot aligns with its broader strategy to reinforce financial system integrity in line with existing regulations, including the Money Laundering (Prevention and Prohibition) Act 2022 and the Banks and Other Financial Institutions Act (BOFIA) 2020. The programme is designed to deepen regulatory understanding of virtual asset risks while supporting market stability.
According to the CBN, the pilot will involve a select group of VASPs chosen for supervisory engagement. It clarified that participation does not override existing regulatory frameworks or the mandates of other authorities. The exercise aims to provide a structured assessment of participating firms’ business models, operational practices, and risk exposures, while guiding improvements in compliance frameworks based on global standards set by the Financial Action Task Force (FATF), including the Travel Rule and measures addressing proliferation financing risks.
Under the pilot, participating firms are required to submit monthly supervisory key performance indicators, engage regularly with regulators, and undergo detailed reviews of governance structures, customer onboarding processes, sanctions screening systems, transaction monitoring mechanisms, and cross-border operations. They are also expected to demonstrate credible implementation of the Travel Rule to enhance transparency in cross-border transactions.
The programme will involve collaboration with the Nigerian Financial Intelligence Unit (NFIU), where applicable, and strengthening oversight coordination across agencies. Entities selected for the first phase include Flutterwave, Paystack, KuCoin, cNGN, Juicyway, and KoinKoin.
The CBN noted that the pilot has been structured in multiple phases, with subsequent cohorts already scheduled and closed to new participants.The apex bank emphasised that the pilot is strictly supervisory and does not confer licensing or regulatory approval on participating entities. Instead, it provides a controlled environment for engagement, enabling the regulator to gather insights while supporting compliance improvements across the sector.
It also assured that all submitted data will be treated as confidential supervisory information, in line with the Nigeria Data Protection Act 2023 and internal confidentiality standards.The move signals a more proactive regulatory stance by the CBN as it seeks to balance innovation with tighter oversight, amid the rapid growth of digital financial services and virtual asset adoption in Nigeria.
