The Central Bank of Nigeria (CBN) recently lifted the ban on cryptocurrency usage, and some significant shift in perception towards it among the general public and traditional financial institutions has been identified as a critical factor in a surge in crypto usage in Nigeria next year (2024).
The Chief Data Protection Officer and Vice President of Legal, Commercial, and Product at Yellow Card, Lasbery Oludimu, said the lifting of the ban signifies a significant shift in perception towards cryptocurrencies among the general public and traditional financial institutions in Nigeria. He added that the CBN’s action also shows the recognition of digital assets’ potential benefits and importance in the evolving economic landscape.
He believed it could encourage more collaboration with traditional financial institutions to explore opportunities within the crypto space, paving the way for greater integration and cooperation between conventional finance and digital assets and, at the same time, noting that the CBN guidelines will engender confidence and trust in the crypto business in Nigeria.
Oludimu said: “With the new policy fostering a regulated environment, Yellow Card anticipates a surge in user adoption and engagement in the coming months. The clarity provided by the regulatory framework instils trust and confidence among users, attracting more individuals and businesses into the crypto space. Based on this, we aim to provide accessible avenues for participation in the formal financial sector, especially in regions with limited traditional banking infrastructure, thereby driving increased user activity and growth on our platform.”
Oludimu noted that with the regulatory landscape in Nigeria now evolving, there would be a need for collaboration between the government, the Central Bank, and crypto industry players. He said this is crucial in shaping the future of digital finance in Nigeria. “Yellow Card is open to engaging constructively with regulators and policymakers, providing insights and expertise to assist in formulating inclusive and effective regulations. Collaborative efforts can create a balanced regulatory framework that encourages innovation, safeguards user interests, and fosters sustainable growth within the digital finance sector,” he added.
The CBN recently released some guidelines for virtual assets to allow virtual assets service providers (VASPs), which include cryptocurrencies and crypto assets organizations, to open accounts with Nigerian banks. This came two years after Apex Bank restricted banks and other financial institutions from operating accounts for cryptocurrency service providers.
The guidelines, issued to all banks and other financial institutions on Friday, December 22, 2023, stipulate conditions for virtual assets providers to open an account. The CBN, however, emphasized that banks and other financial institutions are still prohibited from holding, trading, and transacting in virtual currencies on their account. The apex bank said the issuance of the guidelines was prompted by the current global trends pointing to the need to regulate the activities of virtual VASPs. Meanwhile, when the ban on crypto transactions was in place, several reports indicated that Nigerians were among the top crypto users in the world.
For instance, early this year, a report by Trading Browser revealed that Nigeria had the most significant number of users and owners of cryptocurrencies in the world based on its study of countries and the percentage of the population that reported that they used or owned cryptocurrency each year from 2019 to 2022.
