Pan-African cryptocurrency exchange Yellow Card Financial has announced its intention to apply for a license in Nigeria following the recent lifting of the country’s cryptocurrency ban. Introduced in 2021, the ban prevented financial institutions from engaging in cryptocurrency transactions and operating exchanges.
With the ban now lifted, Yellow Card aims to capitalize on the opportunity by establishing a regulated presence in Nigeria. According to Ogochukwu Umeokafor, the director of product management at Yellow Card, “You’ve waited for something and it has come true, and we’ll jump on it immediately.” Umeokafor emphasized the importance of operating in a regulated environment, which would not only enhance business operations but also instill greater confidence among customers.
Expansion of Services and Attraction of Institutional Investors
Currently, Yellow Card offers limited cryptocurrency services in Nigeria, allowing users to buy and sell Bitcoin and Tether’s stablecoin USDT with the naira. The platform also facilitates other financial transactions. However, with the license application, Yellow Card aims to expand its services and attract institutional investors.
Yellow Card, which is already present in Nigeria and over 15 other African countries, had already engaged in discussions with Nigeria’s Securities and Exchange Commission (SEC) regarding the operation of a cryptocurrency exchange. The SEC had invited applications for licenses from issuers, custodians of digital assets, and exchanges. However, Yellow Card faced a challenge in the form of needing a bank account to apply for a Virtual Asset Service Provider license, which was not possible under the previous ban.
In a circular issued on Friday, the Central Bank of Nigeria directed banks to open accounts for crypto firms, overturning the previous order that mandated the closure of accounts associated with cryptocurrencies. The initial ban was implemented by the central bank to combat money laundering and terrorism financing but had created uncertainties and hindered the operations of crypto businesses in the country.
Despite the challenges faced during the ban, Umeokafor remained optimistic about Yellow Card’s future. “It brought a lot of uncertainties. We didn’t know how to proceed with our business. We didn’t know if we were still going to survive.” The inability to access bank accounts forced the company to explore alternative ways to sustain its operations.
Significant Cryptocurrency Adoption in Nigeria
Nigeria has experienced significant cryptocurrency adoption, becoming the second-largest market after India. This adoption is driven by the population’s desire to hedge against the weakening local currency. The Nigerian naira has depreciated by almost 49% this year, prompting residents to turn to crypto assets as a store of value.
A recent survey revealed that Nigeria is the most crypto-savvy nation, surpassing the United States and European countries. The survey indicated that 99% of Nigerians are fully aware of cryptocurrencies, with 70% understanding the value, operations, and fundamentals of blockchain technology. Cryptocurrency has become a popular hedge against inflation in recent years, following the poor performance of the naira coupled with double-digit inflation.
