After the Central Bank of Nigeria (CBN) lifted its restriction on banks enabling cryptocurrency transactions, the Nigerian cryptocurrency landscape is changing. As Nigerian crypto expert Rume Ophi noted, this development has its own issues and repercussions.
Ophi discusses the Nigerian Securities Exchange Commission (SEC)’s new cryptocurrency exchange regulatory framework with Cointelegraph. Despite the CBN’s progress, the SEC’s strict license requirements will affect the local crypto exchange business. The SEC’s $556,620 minimum paid-up capital requirement is a major worry. Many local crypto exchanges cannot afford this large sum, risking their sustainability.
Ophi warns that this high capital requirement could make foreign exchanges dominate Nigerian platforms. This change could stifle local crypto enterprise and innovation.
The Nigerian SEC issued complete guidelines on digital asset issuance, offering platforms, and custody in May 2022, marking a major step toward legally regulating cryptocurrencies in the country. This 54-page document specifies that exchanges must obtain a virtual asset service provider (VASP) license by completing application and fee requirements.
In Nigeria, Africa’s largest economy, bitcoin knowledge and usage are high. Nigeria ranks seventh in crypto adoption and usage among 154 nations in Chainalysis’ 2020 Cryptocurrency Geography Report. This high familiarity with cryptocurrencies in Nigeria signals strong growth and investment possibilities.
Ophi blames the earlier restriction on financial institutions servicing crypto exchanges for the lack of foreign crypto investment in the country. This ban lowered investor confidence and international crypto investment into Nigeria.
Hope returns once the CBN’s ban was lifted. Ophi thinks this turnaround will help Nigeria attract foreign bitcoin investment and create jobs in Web3 and the crypto business. This might boost economic growth and technology in Nigeria, making it a worldwide crypto player.
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