Yellow Card Expanding in Nigeria
Yellow Card Exchange, a Pan-African crypto trading platform, is actively seeking licensing in Nigeria following the reversal of the cryptocurrency transaction ban for banks by the Central Bank of Nigeria. The exchange aims to capitalize on the first-mover advantage and dominate the African market, similar to Jack Dorsey’s Cash App. Ogochukwu Umeokafor, the exchange’s Director of Product Management, stated that they want a regulated environment to gain more confidence from users and move the business forward. Yellow Card Exchange has initiated the approval process with the Nigerian Securities and Exchange Commission (SEC), but progress was previously hindered by the need for a functional corporate account under the CBN rule.
Nigeria’s Financial Landscape
The Central Bank of Nigeria (CBN) has introduced a Central Bank Digital Currency (CBDC) called the e-Naira, making it the first apex bank in Africa to do so. The general acceptance of Bitcoin in Nigeria has led to various humanitarian projects in the country. The e-Naira, launched in October 2021, serves as a digital version of the national currency and aims to enhance financial inclusion, reduce remittance transfer costs, and minimize informality in the economy. However, its usage within the country has been limited, prompting the Nigerian government to seek assistance in redesigning and promoting it. The CBN is adjusting the e-Naira model to encourage greater use.
Lifting of Ban and Updated Guidelines
In February 2021, the CBN imposed a ban on cryptocurrency transactions due to concerns about money laundering and terrorism financing. However, on December 22, 2023, the ban was lifted, and fresh guidelines were issued for financial institutions overseeing crypto transactions. These guidelines establish minimum standards for banking relationships with virtual assets service providers (VASPs), including crypto exchanges. The CBN’s decision aligns with its strategy to regulate the crypto industry in Nigeria and restore the country’s position as a significant hub for crypto trading in Africa.
Hot Take: Nigeria Embracing Crypto Regulation for Growth
Nigeria’s decision to lift the ban on cryptocurrency transactions and introduce regulations reflects its commitment to foster growth in the crypto industry. By providing a regulated environment and establishing standards for banking relationships with VASPs, Nigeria aims to attract more investors and traders, enhance financial inclusion, and position itself as a leading crypto hub in Africa. The move has been welcomed by the local blockchain industry, which urges the Nigerian government to implement comprehensive and favorable regulations to support further development and innovation in the sector.
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