Central Bank Of Nigeria Lifts Ban On Transacting In Cryptocurrency, Industry Reacts

5 views 7:47 am 0 Comments February 7, 2024

The Central Bank of Nigeria (CBN) has issued a memo to all banks and financial institutions that lifted its ban on bitcoin and outlined new guidelines for virtual asset service providers in Nigeria, setting the scene for a rush of exchanges and cryptocurrency service providers eager to service the nation.

This memo was a long-awaited reversal of the agency’s February 2021 ban on banks and financial institutions dealing in or facilitating transactions in crypto assets. At the time, the CBN felt the concerns over money laundering and terrorism financing outweighed the benefit of digital assets. More than two years later, in May 2023, there was regulatory movement when the Securities and Exchange Commission of Nigeria published regulations that aimed to find common ground between those who advocated for an outright ban and those who sought free, unregulated use of crypto assets

The Central Bank of Nigeria acknowledged in its memo that many of its citizens had been engaging in cryptocurrency use, leveraging peer-to-peer exchanges as an alternative to traditional financial services. According to Chainalysis, crypto transactions in Nigeria grew by 9% year over year between summer 2022 and summer 2023, reaching $56.7 billion.

Motivation for engaging in the cryptocurrency market were clear as Nigeria experienced extreme currency volatility and uncertainty at various points in 2023.

Service providers are lining up to engage with the growing market.

ChangeNOW, a leading non-custodial exchange, was quick to issue a press release in which company representatives praised the Central Bank of Nigeria for providing their citizens proper access to the crypto ecosystem. Reached for comment, partnerships manager Kate Lifshits said the company was busy arranging for a “full engagement” with the Nigerian tech community, including collaborations with local institutions and community groups. Their belief, Lifshits shared, is the Nigerian market will embrace their non-custodial exchange and full suite of products.

Pan-African exchange Yellow Card is also seeking to get in on the action, announcing they will apply for a license in the country, and similarly praising the regulators for bringing the crypto industry out of the gray-market. Like ChangeNOW, Yellow Card offers hundreds of crypto trading pairs, payments API services, and a full suite of other cryptocurrency products.

Both services intend to launch fully in the near future. More will surely be behind.

This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.