The Central Bank of Nigeria (CBN) has issued new guidelines to regulate the activities of Bureau de Change (BDC) operators, effective from June 3, 2024. The guidelines introduce significant changes, including new minimum capital requirements and the prohibition of certain activities.
According to a circular released on Wednesday by CBN’s Director of Financial Policy and Regulation, Haruna Mustafa, Tier-1 BDCs must now have a minimum capital base of ₦2 billion, while Tier-2 BDCs require ₦500 million. Additionally, the mandatory caution deposits of ₦200 million and ₦50 million for Tier-1 and Tier-2 BDCs respectively have been removed.
The new regulations also ban BDC operators from street trading, international outward transfers, financing political activities, dealing in gold or other precious metals, and engaging in crypto assets or other virtual assets. All transactions above USD500 must be conducted digitally.
Existing BDCs are required to reapply for new licenses and meet the new capital requirements within six months from the effective date. The CBN’s circular emphasized that sellers of foreign currencies equivalent to USD10,000 and above must declare the source and comply with all AML/CFT/CPF regulations.
This regulatory overhaul comes as Nigeria’s currency, the Naira, has experienced significant volatility. The Naira, which was around ₦700/$1 in May 2023, fell to an all-time low of approximately ₦1,900/$1 in February 2024 before recovering to about ₦1,100/$1 in April and then declining again to ₦1,600/$1 in May 2024. CBN Governor Olayemi Cardoso attributed this instability to “seasonal demands.”
The new guidelines are part of CBN’s efforts to stabilize the foreign exchange market and ensure compliance with
