According to Nigerian cryptocurrency expert Rume Ophi, the recent lifting of the CBN restriction will also boost foreign investment in cryptocurrency in Nigeria and make it easier for locals to get jobs in Web3 and the cryptocurrency sector.
Rume Ophi, a Nigerian cryptocurrency analyst, claims that even though the Central Bank of Nigeria (CBN) has lifted restrictions on Nigerian banks facilitating cryptocurrency transactions, the Nigerian Securities Exchange Commission’s (SEC) requirements for crypto licences will drastically reduce the number of local crypto exchanges operating in the nation.
In a recent interview, Rume clarified that the minimum paid-up capital requirement of $556,620 (N500 million naira) is the reason why many local exchanges cannot afford to remain in existence. He argued that rather than creating a balanced economy, this criterion will lead to the majority of foreign exchanges operating in Nigeria.
A 54-page document titled “New Rules on Issuance, Offering Platforms and Custody of Digital Assets” was posted on the Nigerian Securities and Exchange Commission’s website in May 2022. This document provides guidelines for Nigerian banking and financial institutions on how to deal with digital assets, as well as opening doors for bitcoin service providers operating there.
Exchanges must abide by the SEC’s regulation in order to receive a virtual asset service provider (VASP) licence. This licence requires application processing, a registration fee, and any other related fees.
According to a global poll with participants from fifteen nations, Nigeria, the largest economy in Africa, has the world’s most cryptocurrency-aware populace. Nigeria placed eighth out of 154 nations in Chainalysis’ 2020 Cryptocurrency Geography Report for acceptance and usage of cryptocurrencies.
The country’s rate of cryptocurrency adoption should, however, have attracted greater international investment in cryptocurrency, but the opposite is true. Rume highlighted that the low investment rate was caused by financial institutions being prohibited from providing support to cryptocurrency exchanges.
Rume explained that the recent CBN ban lift would also enable Nigeria’s crypto foreign investment to rise and facilitate the employment of locals in Web3 and the crypto industry.