Nigeria’s SEC has granted its first provisional license to Quidax, an African-founded crypto exchange. This marks a significant step toward formal recognition and regulation of the country’s digital asset industry.
Quidax, a crypto exchange founded in Africa, has been granted the first provisional operating license by the Securities and Exchange Commission (SEC) in a significant development for Nigeria’s emerging cryptocurrency sector.
This crucial development represents the commencement of formal recognition and the much-needed regulatory supervision of the country’s digital asset industry.
As per a press release distributed to Cointelegraph, the SEC’s license authorizes Quidax to function as a registered crypto exchange in Nigeria, which is a substantial stride toward the legitimacy of the crypto market.
This milestone was announced by Quidax in an email, where it compared the SEC’s approval to a “shot of adrenaline” for the Nigerian crypto community, thereby inspiring further innovation and expansion.
Regulatory Milestone
Buchi Okoro, Co-founder and CEO of Quidax, appreciated the SEC’s decisive efforts to establish order, confidence, and investor protection in the crypto industry, particularly under the new leadership of Dr. Emomotimi Agama.
This regulatory approval now allows Quidax to collaborate with banks and other financial institutions, subject to the Central Bank of Nigeria’s approval.
Following a comprehensive amendment to its regulations on June 21, the SEC’s licensing process encompassed digital asset issuance, offering platforms, exchange, and custody.
A significant component of this regulatory overhaul is the Accelerated Regulatory Incubation Programme (ARIP), which is intended to assist virtual assets service providers (VASPs) in complying with the new regulatory requirements.
The initial concern was that the stringent licensing requirements might substantially reduce the number of local crypto exchanges, despite these advancements.
For Digital Assets Exchanges and Digital Assets Offering Platforms (DAOs), the Nigerian Securities and Exchange Commission (SEC) mandates a minimum upfront capital requirement of 500 million naira ($556,620) and a current Fidelity Insurance Bond that covers at least 25% of the stipulated minimum paid-up capital.
The Crypto Landscape of Nigeria
In terms of global cryptocurrency adoption, Nigeria, the largest economy in Africa, has maintained a consistent high ranking. According to a recent survey that encompassed 15 countries, Nigeria has the most cryptocurrency-aware population in the globe.
Nigeria was ranked second in crypto adoption among 154 countries in Chainalysis’ “2023 Cryptocurrency Geography Report,” highlighting its critical role in the global digital asset ecosystem.
In spite of the high adoption rate, the anticipated surge in foreign crypto investment has not occurred as anticipated.
The new regulatory framework and Quidax’s licensing have the potential to change this trajectory by creating a more stable and secure environment for both local and international investors.
