Potential Surge in Cryptocurrency Usage as Nigeria Lifts Ban on Bank Accounts for Crypto Firms

Yellow Card, a prominent cryptocurrency exchange operating across the African continent, has announced its plans to secure licensing within Nigeria. This move comes in the wake of the recent decision by the Central Bank of Nigeria to lift the ban on local banks and financial institutions providing services to crypto firms. This development is poised to accelerate the utilization of digital assets in Nigeria, a nation known for its swift adoption of cutting-edge technologies.

The decision to revoke the ban, disclosed last week, signifies a reversal of the directive imposed in 2021, which had restricted financial institutions from facilitating cryptocurrency transactions. During that period, the central bank explicitly stated that it was not prohibiting crypto trading, leading users to shift towards peer-to-peer trading alternatives.

The removal of restrictions on crypto exchanges and service providers, allowing them to establish bank accounts, is anticipated to have a substantial impact on adoption rates. Key players in the cryptocurrency space, such as Yellow Card, are actively preparing to obtain a crypto license within Nigeria, aligning their operations with the regulatory frameworks introduced in May.

Lasbery Oludimu, the Chief Data Protection Officer at Yellow Card, is optimistic about the future, foreseeing a surge in user adoption and engagement in the coming months, driven by the newfound regulatory clarity, told local news outlet Nairametrics on Wednesday. He underscores the importance of a clear regulatory framework in instilling trust and confidence among users, thereby attracting a greater number of individuals and businesses to participate in the burgeoning crypto space.

Citing Central Bank circular FPR/DIR/PUB/CIR/002/003, though yet to be officially published on the CBN website, the decision to lift the ban is influenced by the global trend of regulating cryptocurrencies. International organizations such as the Financial Stability Board (FSB) and the International Monetary Fund (IMF) have advocated for the supervision of the crypto industry rather than enforcing outright bans.

A notable figure in the Nigerian crypto community has enthusiastically described the Central Bank circular as a "Christmas present," reflecting the positive reception within the local cryptocurrency ecosystem. As Nigeria progresses towards a more regulated crypto environment, the overall outlook indicates a heightened vibrancy and increased participation in the cryptocurrency space.

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things are about to get really interesting in Nigeria!! what a Christmas present!????

Nigeria's CBN just removed restrictions on crypto transactions. a 180 degree shift from the total ban in 2021.

we now have clear guidelines for crypto, but with stringent customer KYC and… pic.twitter.com/cXhKpWmVFO

— gwera ???????????? (@notgwera) December 22, 2023

Read More: FSB Downplays Impact: Downturn in Multi-Function Crypto Firms Won't Severely Affect 'Real Economy