The Central Bank of Nigeria (CBN) has launched a pilot program for Anti-Money Laundering (AML), Counter-Financing of Terrorism (CFT), and Counter-Proliferation Financing (CPF) supervision targeting Virtual Asset Service Providers (VASPs), including Flutterwave and Paystack.
This initiative, announced in a statement dated March 31, 2026, is part of the CBN’s ongoing efforts to enhance the integrity of Nigeria’s banking sector.
The pilot is designed to strengthen the financial system’s stability and oversight of virtual asset-related activities, in accordance with the Money Laundering (Prevention and Prohibition) Act 2022, the CBN Act, and the Banks and Other Financial Institutions Act (BOFIA) 2020.
What the CBN is saying
The CBN emphasized that this pilot is a risk-based supervisory initiative that aligns with its broader mission to monitor the growing virtual asset sector.
- “This pilot does not alter, replace, or supersede the existing regulatory framework governing virtual assets in Nigeria or the mandates of other competent authorities,” the bank stated.
The program aims to enhance the understanding of AML, CFT, and CPF risks across the participating VASPs, improving their operational practices and frameworks. It specifically focuses on ensuring compliance with the FATF (Financial Action Task Force) Recommendations 15 and 16, which address the Travel Rule and proliferation-financing controls.
- “The Pilot is designed to develop a structured understanding of AML/CFT/CPF risks, business models, and operational practices across participating entities,” the CBN added. “It also supports VASPs in strengthening their AML/CFT/CPF frameworks in line with emerging supervisory expectations.”
Get up to speed
The development comes shortly after the CBN introduced a mandatory Cybersecurity Self-Assessment Tool (CSAT) for all regulated financial institutions in a bid to bolster the resilience of Nigeria’s banking sector against rising cyber threats.
- This initiative is also part of the CBN’s statutory responsibilities under the Banks and Other Financial Institutions Act (BOFIA) 2020.
- The CSAT will serve as a critical supervisory instrument to assess the cybersecurity frameworks of banks and other financial entities. Specifically, it focuses on risk management practices, incident response strategies, and controls related to third-party technologies.
- The CSAT is designed as a supervisory instrument to provide the CBN with “comprehensive information on the cybersecurity posture of regulated institutions.”
Insights derived from the CSAT will support risk-based supervision and enhance regulatory oversight of cybersecurity risks across the financial system.
More insights
During the pilot, participating VASPs are required to:
- Submit monthly AML/CFT/CPF supervisory Key Performance Indicators (KPIs) using the prescribed CBN template.
- Engage in supervisory sessions with the CBN (and the NFIU, where applicable).
- Undergo reviews of governance, customer onboarding, sanctions screening, transaction monitoring, and cross-border activities.
- Provide credible implementation plans for the FATF Travel Rule.
The CBN clarified that while the pilot is a supervisory process, it does not confer regulatory status, approval, licensing rights, or authorization to the participating entities.
The first set of VASPs involved in the pilot includes:
- cNGN
- Flutterwave
- Juicyway
- KoinKoin
- KuCoin
- Paystack
These entities will undergo the pilot program in multiple phases, with the subsequent phases already scheduled.
The CBN reassured that all data submitted by the participating VASPs will be treated as confidential supervisory information, handled in compliance with the Nigeria Data Protection Act 2023 and CBN confidentiality standards.
What you should know
This initiative follows closely on the heels of the CBN’s introduction of new technology-driven regulations in March 2026, requiring banks and other financial institutions to deploy automated anti-money laundering systems.
These measures aim to strengthen the monitoring and detection of suspicious financial transactions in Nigeria’s increasingly digitized financial system.
According to the CBN, the new regulations set baseline standards for anti-money laundering solutions and aim to enhance compliance with existing financial crime laws, addressing concerns such as money laundering, terrorism financing, and proliferation financing.
