After a recurrent back and forth over the past few months, the Nigerian Securities and Exchange Commission (SEC) has finally granted a provisional license to two crypto exchanges. This is a major development, a first of its kind approval granted to any crypto exchange operator in Nigeria.
In a statement released by the Nigerian SEC on Aug 29, Quidax and Busha, the two African-based crypto exchange platforms can now launch their operations legally under a special arrangement which the authorities have termed “Approval-in-Principle.”
The process started earlier this year in January. As a part of its special Accelerated Regulatory Incubation Program, designed as a typical government-backed incubation program, the Nigerian SEC had sought applications from interested companies.
The applicants were scrutinised, and the framework of the program was then released in June 2024. It stated that selected companies were to be allowed to operate their blockchain-based businesses under the watchdog’s supervision. Now, the names of the selected companies have been made public.
Five Other Companies On the List
Along with Quidax and Busha, five other companies have also been accepted to the RI (Regulatory Incubation) program. These are Trovotech Ltd, Wrapped CBDC Ltd, HousingExhange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd – all working towards creating specific blockchain-based innovative solutions. They could soon get to roll out their products in the Nigerian market.
Promising a positive outcome and emphasising stricter scrutiny while keeping consumer-protection at the forefront, the SEC in its statement said:
“The SEC uses this medium to reiterate that only approved digital exchanges and platforms are legally authorized to carry out the business of crypto trading in any form in Nigeria. In this regard, the ARIP and RI remain the only avenues for well-intentioned entities to legitimately introduce their digital products and services to the Nigerian Capital market.”
Nigerian Authorities Had Threatened To Declare Crypto Trading A National Security Threat
This is a major development since Nigeria’s National Security Adviser (NSA) had threatened to declare crypto trading as a national security threat, earlier in May 2024.
Further, as a part of its stricter regulatory measures, clamping down on global crypto exchanges and their operations non-grata in the country, Nigeria had also banned Binance and arrested its executives.
Now, a provisional license to two two African crypto exchanges sends a positive message. It has been welcomed by the Nigerian crypto community.
What Changes?
With Quidax and Busha getting a provisional license to operate, it could open doors for other crypto exchange platforms. While Nigeria is comparatively more crypto-friendly compared to other countries in the region, the fiasco with Binance had significantly dampened the overall confidence of blockchain-driven tech companies.
Amidst the frequent devaluation of Naira fuelling the growing popularity of cryptocurrencies in Nigeria, this move could positively impact the country’s fintech sector and help create a more acceptable environment for blockchain-based innovations.
