The Central Bank of Nigeria Lifts Restrictions on Cryptocurrency Firms
The Central Bank of Nigeria (CBN) has announced the lifting of its restrictions on cryptocurrency firms, allowing them to open bank accounts in the country. This decision comes after a previous order in February 2021 that required banks to close accounts associated with digital asset activity. However, it’s important to note that the ban on banks transacting in cryptocurrency or holding digital assets remains in place.
New Regulations for Virtual Asset Service Providers (VASPs)
Under the new policy, Virtual Asset Service Providers (VASPs) in Nigeria must be regulated by the country’s Securities and Exchange Commission (SEC) before operating. Additionally, they are required to deposit at least 500 million Naira (approximately $550,000 USD) in a bank account to obtain a license. This requirement may pose challenges for smaller players in the market.
Yellow Card Plans to Apply for a License
Yellow Card, a pan-African exchange, intends to apply for a license following the lifting of the crypto ban. The company faced difficulties due to not having a Nigerian bank account, which was a prerequisite for licensing.
Crypto Adoption and Peer-to-Peer Trading in Nigeria
Nigeria has experienced increasing crypto adoption, particularly among its tech-savvy younger population. Despite regulatory restrictions, crypto traders in the country often engage in peer-to-peer trading.
Hot Take: Nigeria Eases Restrictions on Cryptocurrency Firms
The recent decision by the Central Bank of Nigeria to lift restrictions on cryptocurrency firms marks a significant development for the country’s crypto industry. By allowing these firms to open bank accounts, it opens up new opportunities for growth and innovation. However, it’s essential to recognize that certain limitations still exist, such as the ban on banks transacting in cryptocurrency. Overall, this move showcases Nigeria’s recognition of the potential benefits of cryptocurrencies while also ensuring regulatory oversight and consumer protection.
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