The Central Bank of Nigeria (CBN) declared that it had withdrawn its prohibitions on Nigerian banks processing cryptocurrency transactions in a circular that was distributed to banks on December 22.Peer-to-peer (P2P) merchants and crypto-fiat exchangers, however, are expected to face increased competition from one another.P2P merchant dominance began when the CBN forbade Nigerian banks from supporting cryptocurrency transactions.It was intended for the ban to eradicate Bitcoin and cryptocurrency usage in Nigeria. Peer-to-peer transactions and direct payment transfers become the new norm in the cryptocurrency world.
Reaching out to players in the local cryptocurrency ecosystem to find out how the new development is being received by the community and industry.Nathaniel Luz, co-founder and CMO of Flincap, told Cointelegraph that the industry will benefit greatly from the ban’s repeal.In his opinion, this indicates that Nigeria is prepared for cryptocurrency companies to establish their headquarters and conduct operations there.Luz stressed that institutional exchanges should be preparing for the Nigerian market as soon as the ban is lifted, since their absence during the prohibition allowed P2P to soar at the expense of other cryptocurrency companies.
“So right now, it’s going to be the survival of the fittest as crypto-fiat exchanges and P2P merchants battle for the largest crypto P2P market in the world.”
Answering the question of whether SEC registration requirements would discourage exchanges from conducting business in Nigeria, Luz said that although obtaining an SEC license is a hurdle for startups, he thinks the crypto industry will gain from it.
He provided an explanation of some of the 2010 recapitalization policy-related developments to the Nigerian banking industry.As a result, some banks had to merge and be acquired by investors, improving the banking industry.The Central Bank of Nigeria forbade all registered financial institutions from providing services to cryptocurrency exchanges, according to a February 2021 Cointelegraph story.Nonetheless, the circular states that the CBN acknowledged that the harsh regulations placed on financial institutions in 2021 are no longer justified given the rising demand and usage of cryptocurrencies worldwide.