Yellow Card Sets To Apply for Nigerian License After Cryptocurrency Ban Reversal

Pan-African cryptocurrency exchange Yellow Card Financial is gearing up to apply for a license in Nigeria following the recent lifting of the country’s cryptocurrency ban. 

The ban, implemented in 2021, restricted financial institutions from engaging in transactions or operating cryptocurrency exchanges. 

If the application goes through, the exchange aims to expand its services and attract institutional investors, marking a strategic move to capitalize on the growing crypto market in Nigeria.

With the ban lifted, Yellow Card sees an opportunity to establish a regulated presence in Nigeria and opens up opportunities for more innovation within the Crypto space. 

Yellow Card offers limited cryptocurrency services in Nigeria, allowing users to buy and sell Bitcoin and Tether’s stablecoin USDT with the naira. This is a sign of a more crypto-friendly environment in Nigeria.

Overcoming Regulatory Hurdles and Expanding Operations

Ogochukwu Umeokafor, Yellow Card’s Director of Product Management, expressed the urgency of capitalizing on this shift opportunity that has been limiting them due to tight regulations.

 “You’ve waited for something and it has come true, and we’ll jump on it immediately.”

he said.

Yellow Card had previously engaged in discussions with Nigeria’s Securities and Exchange Commission (SEC) regarding operating a cryptocurrency exchange. 

However, regulatory uncertainties, especially the need for a bank account to apply for a Virtual Asset Service Provider license, posed challenges during the cryptocurrency ban.

The recent Central Bank of Nigeria circular directing banks to open accounts for crypto firms has removed a significant obstacle. 

Yellow Card and other crypto businesses faced uncertainties and operational challenges during the ban, adapting to alternative ways to sustain their operations.

“We want a regulated environment because it’ll help the business move; it will help people have more confidence in doing business with us.”

Yellow Card Exchange has initiated the approval process with the Nigerian Securities and Exchange Commission (SEC), navigating through obstacles that previously impeded its progress.

The regulatory landscape in Nigeria underwent a significant transformation with the recent directive from the Central Bank, allowing banks to open accounts for Virtual Assets Service Providers (VASPs) and facilitating a more conducive environment for cryptocurrency-related businesses.

Nigeria’s Crypto Landscape and Increased Adoption

Nigeria, known for its crypto-savvy population, has witnessed a surge in cryptocurrency adoption, mainly driven by the desire to hedge against the devaluation of the local currency.

Nigeria, second only to India, has witnessed significant cryptocurrency adoption, primarily driven by the population’s desire to hedge against the weakening local currency. 

Nigerian exchanges recorded $60 billion in stablecoin transactions between August 2021 and July 2023, Chainalysis said.

The lifting of the cryptocurrency ban aligns with the growing crypto-savvy nature of the Nigerian population. 

“Perhaps even more notable is that Nigeria’s crypto economy continues to grow despite market turmoil. In fact, Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied. Its growth rate of 9.0% places it third among those six.”

Chainanalysis report.

The country’s crypto awareness surpasses that of the United States and Europe. 

This trend shows a big opportunity behind Yellow Card’s strategic move to secure a license and expand its operations in Nigeria, aligning with the increasing adoption and recognition of cryptocurrencies in Nigeria.