SEC Approves Two Crypto Exchanges as Nigeria Tightens Regulations on Digital Assets
The Nigerian Securities and Exchange Commission (SEC) has granted provisional approval to two crypto exchanges, Busha Digital and Quidax Technologies, to operate in the country. This decision is part of a broader strategy to enhance transparency and security in Nigeria’s burgeoning crypto market and to encourage greater participation among Nigerian youths in financial markets.
The approvals come in the wake of recent updates from the Central Bank of Nigeria (CBN) on Virtual Asset Service Providers (VASPs). To ensure compliance with these new regulations, the SEC has launched the Accelerated Regulatory Incubation Program (ARIP). Both Busha and Quidax are participating in this program, designed to ensure that crypto platforms adhere to stringent guidelines for issuing, holding, and trading digital assets.
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Additionally, the SEC has approved five other digital asset companies—Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd—to join the Regulatory Incubation (RI) program.These companies will work closely with the SEC to test new services, particularly those using distributed ledger technology (DLT).
One of the companies, Wrapped CBDC Ltd, is spearheading the development of Nigeria’s first regulated stablecoin, the cNGN, which is expected to launch in 2024.
This stablecoin aims to offer more stability for everyday transactions, especially for cross-border payments.
However, not all stakeholders are pleased with the SEC’s evolving regulatory framework. A proposal to increase registration fees from 30 million naira to 150 million naira could make it difficult for smaller exchanges to compete.
While Busha and Quidax may have the resources to manage these higher costs, smaller players could struggle, potentially reducing options for consumers.
The SEC’s new approach presents both opportunities and challenges for Nigeria’s crypto landscape. Over the next few years, it will become clear whether these regulatory changes foster innovation or hinder the growth of new startups in the sector.
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