Yellow Card seeks exchange license after Nigeria lifts crypto ban – Digital Transformation News
Pan-African exchange Yellow Card Financial Inc. will “immediately” apply for a license in Nigeria after the country’s central bank lifted a ban on cryptocurrencies that was imposed in 2021. “You’ve waited for something and it has come true and we’ll jump on it immediately,” Ogochukwu Umeokafor, director of product management at Yellow Card, said in a phone interview from London. “We want a regulated environment because it’ll help the business move; it will help people have more confidence in doing business with us.”
Africa-focused Yellow Card, which operates in Nigeria and at least 15 other countries on the continent, had initiated discussions with Nigeria’s Securities and Exchange Commission to operate a crypto exchange after the SEC invited applications for licenses for issuers and custodians of digital assets and exchanges. But it needed a bank account to apply for a Virtual Asset Service Provider license which was not possible before now. In a circular dated Friday, the Central Bank of Nigeria asked lenders to open accounts for crypto firms, reversing an order that barred deposit-taking financial institutions from transacting in or operating cryptocurrency exchanges. That order also asked banks to immediately close accounts associated with cryptocurrencies.
“It brought a lot of uncertainties. We didn’t know how to go ahead with business. We didn’t know if we were still going to be afloat.” Umeokafor said of the CBN order, which the regulator imposed at the time to prevent money laundering and terrorism financing. “We didn’t have access to bank accounts. We had to start looking for other innovative ways to still be in business. Banks won’t even touch funds from us anymore.”
Crypto Adoption
Nigeria has the highest rate of cryptocurrency adoption after India, spurred by residents seeking crypto assets to hedge against a currency that has weakened almost 49% this year after President Bola Tinubu eased rules in a bid to remove the spread between the official and unauthorized street rates.
The easing of the currency rules will be a boost for crypto exchanges, which have been seeking to expand in the nation, which ranks second in blockchain data company Chainalysis Inc.’s adoption index. Currently, Yellow Card has a business registration status in Nigeria and offers limited crypto services such as buying and selling Bitcoin and Tether’s stablecoin USDT with the naira. It also allows customers to use its platform for other financial transactions. “It is going to be a big boost to our business. I think one of the main things this will help with will be to attract institutional investors. When people see that, oh, crypto is now licensed and Yellow Card has a license, it will give them more confidence to do business with us,” she said.
