In Nigeria, despite the allure of the burgeoning cryptocurrency market for venture capitalists, the government’s proposed imposition of high transaction fees casts a shadow over the thriving peer-to-peer (P2P) sector. Ray Youssef, CEO of financial services app NoOnes, points out that such regulatory measures could stifle the rise of P2P platforms in the country. A recent Nigerian Securities and Exchange Commission report has suggested escalating the registration costs for crypto exchanges by a substantial margin.
Registration Fees Surge for Crypto Exchanges
The governmental financial watchdog has laid out a plan to quintuple the fee for crypto exchange registrations, leaping from the equivalent of $18,620 to $93,000. Youssef, a veteran in the industry and co-founder of the now-defunct Paxful exchange, interprets this move as an open invitation to more established crypto entities to enter the Nigerian arena. The government’s stance on limiting P2P transactions is chiefly driven by concerns over foreign exchange volatility. Nevertheless, Youssef expresses his optimism about Nigeria’s ability to sustain its significance in the crypto ecosystem amidst these new regulatory hurdles.
Nigeria’s Crypto Landscape and Global Position
Despite regulatory challenges, Nigeria boasts a strong P2P cryptocurrency market, having ascended to the top globally after the Central Bank’s 2021 prohibition on crypto transactions by financial institutions. With the ban now lifted, Nigeria reopens its doors to licensing applications from crypto exchanges. Moreover, the government’s collaboration with Gluwa to promote the eNaira digital currency highlights the potential shift towards using crypto as a tool for economic development and innovation.
The Nigerian government’s relationship with crypto exchanges has seen its share of friction, with platforms like Binance suspending transactions involving the national currency due to regulatory pressures. Nonetheless, the country’s enthusiasm for cryptocurrency remains undiminished, as evidenced by its ranking as the most crypto-curious nation globally based on the volume of related Google searches.
