CBN Lifts Ban on Crypto Exchange In Nigeria: Yellow Card Inc. Applied For A License To Operate

Yellow Card Financial Inc., a prominent pan-African cryptocurrency company with operations in Nigeria and approximately 15 other African countries, has announced its intention to apply for a license in Nigeria. This decision follows the recent lifting of a ban on cryptocurrency transactions by the Central Bank of Nigeria (CBN), a ban that had been in place for two years.

Ogochukwu Umeokafor, the Director of Product Management at Yellow Card, expressed the company’s enthusiasm for the regulatory shift. He stated that Yellow Card has been seeking a regulated environment to enhance its business operations and strengthen consumer confidence in their services.

In anticipation of regulatory changes, Yellow Card had already initiated discussions with the Nigerian Securities and Exchange Commission (SEC) regarding the operation of a cryptocurrency exchange. This move was in response to the SEC’s invitation for applications from digital asset issuers, holders, and exchange operators.

A key requirement for the application of a Virtual Asset Service Provider (VASP) license, as highlighted by the company, is the possession of a bank account.

The policy change by Nigeria’s apex bank, announced on Friday, December 22, 2023, directed banks and financial institutions to facilitate accounts for cryptocurrency firms. This directive effectively reverses the previous order that prohibited deposit money banks and financial institutions from engaging in or facilitating transactions for cryptocurrency exchanges and mandated the immediate closure of accounts associated with cryptocurrencies.

According to a report by Bloomberg, Nigeria has experienced a significant surge in cryptocurrency adoption, ranking second only to India. This increase is attributed to Nigerian citizens turning to digital assets as a hedge against escalating inflation and the devaluation of the naira. The Nigerian government’s decision on June 14, 2023, to relax foreign exchange rules and bridge the gap between official and parallel market rates is also believed to further stimulate the cryptocurrency market, particularly for exchanges looking to expand in Africa’s largest economy.

Currently, Yellow Card offers limited cryptocurrency services in Nigeria. The company holds a registration status that permits the buying and selling of Bitcoin and Tether’s stablecoin using the Nigerian naira. Additionally, Yellow Card’s platform facilitates various other financial transactions for its customers.