Nigerian finance professional Olumide Adesina highlights the significance of cooperation with regulators for crypto players looking to lead the industry in the wake of the Central Bank of Nigeria's (CBN) lifting its ban on digital assets for Nigerian banks and financial institutions. Adesina emphasizes that those who engaged constructively with regulators during the ban period are likely to be early gatekeepers to the industry, positioning them for success in the evolving crypto landscape.
Key Points:
Cooperation with Regulators: Adesina underscores the importance of collaboration with regulators, stating that crypto players who actively engaged with the Central Bank of Nigeria during the ban period have achieved significant success in influencing the regulatory stance. The recent circular announcing the ban lift is seen as a positive step, indicating the CBN's focus on financial stability and a willingness to open the country's financial ecosystem to approved digital securities.
Early Gatekeepers: Players who cooperated with regulators are viewed as the biggest winners and potential early gatekeepers to the crypto industry in Nigeria. The constructive engagement during the ban period positions them favorably for future developments and regulatory advancements in the digital asset space.
Stablecoin Impact: Adesina discusses the lukewarm activity on the NGN/USDT stablecoin trading pair, suggesting a cautious approach by stablecoin holders amid the recent surge in altcoins. He anticipates that the new stablecoin issued through a collaboration between banks and local fintech companies will play a substantial role in the P2P market and contribute to expanding the country's financial system.
P2P Market Dynamics: Nigeria is currently the world's largest P2P market, a result of the 2021 CBN ban on digital assets. Adesina notes that P2P transactions incurred higher rates than standard forex rates, and the recent ban lift may impact the dynamics of the P2P market. The cooperation of crypto-fiat exchanges and P2P merchants will be crucial in navigating and competing in the evolving landscape.
Challenges for Crypto Exchanges: Adesina acknowledges the challenges faced by crypto exchanges in opening bank accounts due to regulatory requirements, particularly the Security Exchange Commission (SEC) license. Crypto exchanges need to be operational before determining transaction rates, and the regulatory landscape will play a crucial role in shaping their ability to operate effectively.
Implications and Outlook: The lifting of the crypto ban by the CBN marks a significant development for the crypto industry in Nigeria. Adesina's emphasis on cooperation with regulators as a key determinant of future leadership underscores the importance of fostering positive relationships for sustainable growth. The evolving regulatory landscape, the impact of stablecoins, and the dynamics of the P2P market will influence how crypto players navigate the emerging opportunities and challenges.
Conclusion: Nigerian crypto players who engaged constructively with regulators during the ban period are poised to play a crucial role in shaping the future of the industry. The ban lift signals a shift in regulatory approach, with a focus on financial stability and the potential inclusion of approved digital securities. As the crypto landscape in Nigeria continues to evolve, cooperation with regulators, strategic positioning, and adaptability will be essential for players aiming to lead in this dynamic and rapidly changing market.
(AMAKA NWAOKOCHA, COINTELEGRAPH, 2023)