Nigerian exchanges discouraged by SEC crypto license requirements
Rume Ophi, a crypto analyst from Nigeria, pointed out that lifting the recent CBN ban would boost foreign investment in Nigeria’s crypto sector, leading to increased job opportunities for locals in Web3 and the broader crypto industry.
The crypto license requirements set by the Nigerian Securities Exchange Commission (SEC) are expected to significantly reduce the number of local crypto exchanges operating in Nigeria.
Despite the Central Bank of Nigeria (CBN) lifting restrictions on banks facilitating cryptocurrency transactions, crypto analyst Rume Ophi explained that the high minimum paid-up capital requirement of $556,620 (N500 million naira) would make it challenging for many local exchanges to afford operation. This, according to Rume, might lead to a dominance of foreign exchanges in Nigeria, creating an imbalance.
The SEC’s guidelines, outlined in a May 2022 document titled “New Rules on Issuance, Offering Platforms and Custody of Digital Assets,” aim to provide a framework for cryptocurrency service providers in Nigeria and offer guidelines for banking institutions on engaging with digital assets.
The regulations require exchanges to obtain a virtual asset service provider (VASP) license by fulfilling application, registration, and other relevant fees.
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According to a global survey covering 15 countries, Nigeria, Africa’s largest economy, stands out with the world’s most cryptocurrency-aware population. Despite ranking eighth in crypto adoption and usage in Chainalysis’ 2020 Cryptocurrency Geography Report among 154 countries, Nigeria’s crypto adoption hasn’t translated into increased foreign investment.
Rume highlighted that the previous ban on financial institutions servicing crypto exchanges was a major factor contributing to the low investment rate.
With the recent lifting of the CBN ban, Rume believes Nigeria’s crypto foreign investment is set to rise, opening up opportunities for local employment in Web3 and the crypto industry.
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Nigerian exchanges discouraged by SEC crypto license requirements
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