Yellow Card Financial, a Pan-African cryptocurrency exchange, has revealed its intentions to pursue a license in Nigeria following the recent lifting of the country’s cryptocurrency ban.
The ban, enforced in 2021, had prohibited financial institutions from engaging in transactions or operating cryptocurrency exchanges.
Now that the ban has been lifted, Yellow Card sees an opportunity to establish a regulated presence in Nigeria. Ogochukwu Umeokafor, the director of product management at Yellow Card, expressed their swift response to the development, stating, “You’ve waited for something and it has come true, and we’ll jump on it immediately,” in an interview with Bloomberg.
Umeokafor underscored the significance of operating within a regulated environment, emphasizing that it would not only enhance business operations but also instill greater confidence among customers.
Presently, Yellow Card provides limited cryptocurrency services in Nigeria, enabling users to trade Bitcoin and Tether’s stablecoin USDT with the naira. Additionally, the platform facilitates various other financial transactions.
Through the forthcoming license application, Yellow Card has aspirations to broaden its service offerings and attract institutional investors, signaling a strategic expansion in its operations.
Nigeria Overturns Crypto Ban Paving the Way for Yellow Card
Yellow Card, presently active in Nigeria and more than 15 other African nations, had already initiated talks with Nigeria’s Securities and Exchange Commission (SEC) regarding the operation of a cryptocurrency exchange. The SEC had called for license applications from issuers, digital asset custodians, and exchanges.
However, Yellow Card encountered an obstacle due to the necessity of a bank account to apply for a Virtual Asset Service Provider license, a step rendered impossible under the prior cryptocurrency ban.
In a recent circular issued on Friday, the Central Bank of Nigeria reversed its previous directive, instructing banks to open accounts for cryptocurrency firms. This move overturned the earlier order that mandated the closure of accounts associated with cryptocurrencies.
The central bank’s initial implementation of the ban was motivated by the aim to counter money laundering and terrorism financing. However, it inadvertently created uncertainties and posed obstacles for cryptocurrency businesses operating in the country.
Umeokafor acknowledged the challenges faced by Yellow Card during the ban, stating, “It brought a lot of uncertainties. We didn’t know how to go ahead with business. We didn’t know if we were still going to be afloat.”
The prohibition on accessing bank accounts compelled the company to seek alternative means to sustain its operations during that period of uncertainty.
Nigeria Sees Increased Crypto Adoption
Nigeria has experienced notable cryptocurrency adoption, ranking second only to India. This surge is fueled by the population’s inclination to hedge against the depreciation of the local currency. The Nigerian naira has witnessed a nearly 49% devaluation this year, prompting residents to turn to crypto assets as a reliable store of value.
A recent survey has highlighted Nigeria as the most crypto-savvy nation, surpassing the United States and European countries in terms of widespread awareness and use of cryptocurrencies. This underscores the significant role that digital assets play in the financial landscape of the country.
According to the survey, Nigeria boasts a remarkable 99% awareness level regarding cryptocurrencies, solidifying its position as a leader in digital asset knowledge and perceived investment interest.
The data indicated that 99% of respondents were fully aware of cryptocurrencies, with 70% demonstrating an understanding of the value, operations, and fundamentals of blockchain technology.
Moreover, the survey highlighted that a significant majority of Nigerians have turned to cryptocurrencies as a hedge against inflation. This trend has gained momentum in recent years due to the underperformance of the naira combined with double-digit inflation, making digital assets an attractive option for preserving value.
