Ahead of the lifting of the digital asset ban by Nigerian banks and financial institutions on December 23, experts suggest that cryptocurrency players who collaborated with the Central Bank of Nigeria (CBN) during the ban rather than engaging in protest are set to lead the industry in the future. Financial professional Olumide Adesina emphasized that those who worked with regulators and the CBN during the ban are likely to become early industry gatekeepers and hold a significant advantage in the evolving landscape.
Adesina highlighted the success of Nigerian cryptocurrency players who actively cooperated with regulators, leading to the softening of the CBN's previous stance. He lauded the recent decision by the CBN to lift the ban as a positive step forward, signaling the central bank's intent to promote financial market openness while emphasizing renewed focus on financial stability.
Regarding the potential impact of the ban's lifting on Nigerian cryptocurrency exchanges and peer-to-peer (P2P) merchants, Adesina pointed out that despite a surge in altcoin holdings, the activity in the NGN/USDT stablecoin pair indicated subdued movement. Consequently, stablecoin platforms are reassessing their approaches.
Adesina predicted that the introduction of a new stablecoin, developed in collaboration with banks and local fintech firms, will contribute significantly to the P2P market and foster the expansion of the country's financial ecosystem.
Nigeria currently leads as the largest P2P market globally, a result of the CBN's ban in 2021. However, Adesina noted that interest rates on P2P transactions remain higher compared to standard FX rates.
Discussing cryptocurrency exchange rates in P2P market transactions, Adesina emphasized the need for operational cryptocurrency exchanges before determining exchange rates. Yet, challenges persist in opening bank accounts for cryptocurrency exchanges due to regulatory licensing requirements imposed by the Securities and Exchange Commission (SEC).
Previously, Flincap's co-founder and chief marketing officer, Nathaniel Luz, highlighted that Nigerian crypto-fiat exchanges and P2P merchants will face competitive dynamics in the Nigerian market amidst the changing landscape.
