Nigeria’s regulation raises crypto access concerns

Many in the industry are wondering what the latest position of Nigeria on crypto regulation would mean for crypto access.

A lot of people in the crypto community are confused about the position and goals of the Nigerian government after their recent interactions with the crypto business. There needs to be more clarity in light of the contradictory signals coming from the government’s recent moves, according to Nathaniel Luz, co-founder and chief marketing officer of Flincap, a local cryptocurrency over-the-counter (OTC) exchange.

Users in the area have now begun to report problems with conventional telecommunication companies allowing them to access the websites of popular cryptocurrency exchanges such as Binance and OctaFX. The regulatory landscape is already murky, and this new event from the evening of February 21 has added fuel to the fire by raising the possibility of a government ban on crypto sites.

According to Luz, the Nigerian government isn’t being very open about its stance on the cryptocurrency business, which might mean that they’re not eager to build relationships with those who work in the field. Luz has criticized the assumption that over-the-counter merchants on the P2P market are responsible for the current exchange rate of 1,800 naira to $1.

He contends that general economic difficulties, not OTC traders, are to blame for the naira’s devaluation and that it is a mistake to hold them accountable. In his analysis of the naira’s decline, Luz cites a number of problems, including an oversupply of the currency, a lack of dollars, an over-reliance on imports, emigrants’ currency exchange, and the unpredictability of Eurobond payments.

He stresses that these reasons, which have much to do with the depreciation of the naira, have little to do with local crypto trading. Many cryptocurrency firms in Nigeria still face challenges in meeting the requirements for operating licenses in the country’s crypto market, despite prior initiatives such as the SEC and CBN removing their crypto bans in 2021.

A considerable paid-up capital of $340,343 (500 million naira) and an application fee of $20,420 (30 million naira) are part of the licensing criteria. Luz argues that the government should stop blaming the local crypto ecosystem for problems with FX and instead concentrate on solving these licensing difficulties.

Following the restriction on institutional purchases and sales of cryptocurrency by the Central Bank of Nigeria in 2021, Nigeria quickly became the biggest P2P market for crypto trading in the world. A rise in peer-to-peer (P2P) trade helped propel Nigeria to the top of the cryptocurrency industry after this restriction. The crypto community is confused and unsure as a result of the recent words and actions of the Nigerian government toward the crypto business.

Efforts to regulate the business are commendable, but the government and crypto space players should have more open communication and clarity. One way to make Nigeria a better place for crypto innovation and investment is to fix the problems with local exchange licenses and stop making the crypto business pay for everyone’s financial difficulties.

Also Read: Thailand’s Securities Commission Decides to Cancel License to ZipMex February 25, 2024