Pan-African cryptocurrency exchange Yellow Card Financial has declared its intention to apply for a license in Nigeria following the recent lifting of the country’s cryptocurrency ban.
The ban, which was imposed in 2021, prohibited financial institutions from conducting or operating cryptocurrency exchanges. Now, with the ban lifted, Yellow Card seeks to take advantage of the opportunity and establish a regulated presence in Nigeria.
“It’s something that people have been waiting for and it has come true,” Ogochukwu Umeokafor, the Director of Product Management at Yellow Card, told Bloomberg. “We will jump on it immediately.”
Umeokafor emphasized the importance of operating in a regulated environment, as it would bolster business operations and foster greater trust among customers.
At present, Yellow Card provides 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. With the license application, the company aims to extend its services and attract institutional investors.
Nigeria Overturns Crypto Ban
Prior to the ban, Yellow Card, which operates in Nigeria and more than 15 other African countries, had already begun discussions with Nigeria’s Securities and Exchange Commission (SEC) regarding the establishment of a cryptocurrency exchange.
The SEC invited applications for licenses from issuers, custodians of digital assets, and exchanges. However, Yellow Card was faced with an obstacle 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.
On Friday, the Central Bank of Nigeria issued a circular directing banks to open accounts for crypto firms, overturning the previous order that had ordered 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 caused uncertainties and hindered the operations of crypto businesses in the country.
Umeokafor acknowledged the difficulties faced by Yellow Card during the ban. “It brought a lot of uncertainties. We didn’t know how to proceed with business. We didn’t know if we were still going to be afloat.” The inability to access bank accounts forced the company to explore alternative ways to sustain its operations.
Nigeria Sees Increased Crypto Adoption
Nigeria has seen considerable cryptocurrency adoption, second only to India, 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.
As reported, a recent survey has revealed that Nigeria is the most crypto-savvy nation ahead of the United States and European countries. Per the survey, Nigeria’s crypto awareness stands at 99% as the country leads in digital asset knowledge and perceived investment drive.
The data showed that 99% were fully aware of cryptocurrencies while 70% understood the value, operations, and fundamentals of blockchain technology. Additionally, it revealed that the majority of Nigerians have turned to cryptocurrency as a hedge against inflation in recent years after a poor performance of the naira coupled with double-digit inflation.
