Nataniel Luzi, the CMO and co-founder of Flincap, claimed that after the removal of the ban, institutional exchanges must get ready for the Nigerian market. According to a December 22 notice to banks, the Central Bank of Nigeria (CBN) claimed it had removed limitations on the nation’s banks involved in crypto transactions.
Nevertheless, the competition between peer-to-peer (P2P) and crypto-fiat exchanges is anticipated to increase.
Nigeria Witness High Crypto Adoption
The veto by the Central Bank of Nigeria on the nation’s banks from assisting in crypto transactions resulted in P2P merchants’ dominance. This prohibition sought to end Bitcoin and the use of crypto in Nigeria. Instead, the crypto community shifted to P2P trades or direct transfers of payments to each other.
In February 2021, a digital media resource claimed that the CBN had prohibited all regulated financial institutions from providing services to crypto exchanges.
A digital media resource got in touch with the local crypto ecosystem’s stakeholders to understand how the community and industry are welcoming the new development. Nathaniel Luz, Flincap’s CMO and co-founder, claimed that removing the veto would be a significant move for the sector.
He suggested that the development indicates the nation’s preparedness for crypto businesses to be domiciled. Further, Luz stressed that with the ban’s removal, institutional exchanges must be getting ready for the Nigerian market.
Nigeria Lifting Ban on Digital Assets
This is because their absence during the veto resulted in P2P going through the root at other crypto businesses’ expense. He also claimed that presently, it will be the survival of the fittest because P2P dealers and crypto-fiat exchanges compete for the biggest crypto peer-to-peer market globally.
Luz responded to whether registration requirements with the Securities and Exchange Commission (SEC) would prevent exchanges from moving to Nigeria to do business. He claimed that despite posing a problem for startups to acquire the SEC approval, it is going to benefit the crypto industry.
Further, Luz talked about some changes in the Nigerian banking industry in 2010 concerning the recapitalization guideline. It resulted in the acquisition of banks by some investors, while others were required to merge, which resulted in an improved banking sector.
Nevertheless, according to the notice, the Central Bank of Nigeria admitted that the rising international crypto demand and adoption make it inexcusable to retain the strict limitations imposed on financial institutions two years ago.
The move towards lifting the restrictions is bound to stimulate an uptick in crypto activity within the country. The crypto-friendly context will facilitate participation of traditional financial institutions in the country’s crypto space.
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