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Journalist
Hassan Shittu
Journalist
Hassan Shittu
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The Nigerian Securities and Exchange Commission (SEC) has made a landmark decision in the country’s crypto stance by granting “Approval-in-Principle” to two digital asset exchanges, including Quidax Technologies Limited, under its Accelerated Regulatory Incubation Program (ARIP).
The approval is a precursor to full registration, which will require these platforms to adhere to stringent consumer protection and transparency standards.
The SEC’s announcement is part of its dual-track strategy involving the ARIP and the Regulatory Incubation (RI) Program. The ARIP was explicitly designed to onboard firms that had already begun operations before the SEC introduced its Rules on Virtual Asset Service Providers in May 2022.
Conversely, the RI Program is intended to assess digital asset firms’ business models and technological innovations in a controlled, real-time market environment.
Through these initiatives, the SEC aims to regulate the burgeoning use of distributed ledger technology (DLT) in creating and trading crypto assets, thereby ensuring a structured and secure growth of the digital assets sector in Nigeria.
The goal is to refine regulatory policies that will govern the future of digital assets in Nigeria, ensuring that firms like Quidax operate with the highest transparency and consumer protection standards.
Nigerian SEC: “Only Approved Exchanges Can Operate”
The SEC’s stance on cryptocurrency regulation is rooted in its dual objectives of encouraging technological innovation and safeguarding investors.
By introducing the ARIP, the SEC has created a pathway for firms that began operations before the official release of the Rules on Virtual Asset Service Providers in May 2022.
This program is particularly focused on ensuring that these firms, now including Quidax, adhere to strict regulatory guidelines.
These programs allow for real-time market testing of crypto-related business models under close regulatory supervision.
The SEC’s decision to grant “Approval-in-Principle” is a cautious but progressive step. Why?
Because while the full registration is pending, the foundation has been laid for a regulated and transparent crypto trading environment.
Notably, the SEC has also made it clear that only approved digital exchanges and platforms will be legally authorized to operate in Nigeria.
The SEC’s engagement with the crypto industry shows its returned recognition of the sector’s potential to contribute to Nigeria’s financial ecosystem.
While this is great news for the Nigerian Crypto community, the government’s earlier decisions have pushed many international exchanges offshore, with the most recent OKX.
Insights from Rume Ophi, Nigeria’s Leading Crypto Market Analyst
To better understand the implications of Quidax’s licensing and the future of crypto regulation in Nigeria, Cryptonews spoke with Rume Ophi, one of the most respected figures in Nigeria’s crypto community.
Ophi commended the SEC for its active engagement with industry stakeholders and its efforts to establish a clear regulatory framework. He highlighted the importance of this engagement, noting;
“Kudos to the chairman of the SEC Nigeria; he is doing his job well. This is a step toward regulating the industry, and it’s making sense.”
He emphasized that approving local platforms like Quidax is a significant development, as it addresses previous concerns about the dominance of international platforms and the challenges local firms might face in meeting regulatory demands.
According to Ophi, Quidax’s licensing is not just a win for the platform but a milestone for the entire Nigerian crypto ecosystem.
He expressed relief and optimism about local platforms being recognized and supported by the regulatory framework, stating:
“We were scared at some points about how local platforms would be able to take care of all of these… So, for a local platform to be operating in terms of these licenses, it means that there is more room for us to do stuff; crypto adoption and crypto education will happen afterwards.”
Ophi believes this move will encourage more local players to participate in the Nigeria crypto market.
However, Quidax’s securement of this approval is a positive indication that local firms can indeed compete and thrive in a regulated environment.
“It’s good so the international guys will not be the only ones controlling the entire industry.”
Implications for Crypto Adoption in Nigeria
Ophi foresees a positive impact on crypto adoption in Nigeria, predicting that the regulatory clarity provided by the SEC will attract institutional investors, fintech companies, and even traditional businesses to explore crypto assets.
“We will see more institutional investors in crypto, companies, and fintech companies. Other companies are going to invest in crypto… they are going to have some of their balance sheets in crypto over time.”
This, he argues, will drive the growth of the market, enhance liquidity, and create more opportunities for Nigerians to engage with digital assets.
However, Ophi also stressed the importance of education in driving adoption. He noted that while Quidax has made efforts in online education, there is a critical need for more grassroots engagement.
Drawing from his experience with other platforms, he suggested that Quidax could enhance its reach by adopting on-ground initiatives similar to those previously implemented by Luno.
“We even went to Computer Village to do on-spot campaigns for crypto. It makes sense for them to grow their business through education, and Quidax can buy into that and implement some of those initiatives to get into the hearts of the people because crypto adoption can only be achieved through that,”
Challenges Ahead of a Future “Crypto Nigeria”
Despite the positive developments, Ophi highlighted potential challenges that could hinder the growth of Nigeria’s crypto industry. He pointed out the risk of regulatory inertia or misalignment, which could stifle innovation and adoption.
He warned that an insensitive government could slow down the adoption of crypto, potentially leaving Nigeria behind in the global digital economy.
“The main challenge I anticipate is to have a government that is insensitive to regulation because they will be behind in terms of letting crypto be known and adopted,”
To mitigate this risk, he called for greater youth involvement in the political process, particularly in shaping crypto-friendly policies.
“Young people should compete for positions in the National Assembly and make laws. Although there will be challenges, we need it for the future of crypto in Nigeria,”
Ophi also touched on the potential for crypto exchange-traded funds (ETFs) in Nigeria, noting that while the concept is promising, the current financial system may pose challenges.
He expressed optimism about the future, suggesting that Nigeria could become a hub for crypto innovation with the right policies and government support.
“We have a very large population of young people who want to do great things in Nigeria.”
He believes that overcoming these challenges will require continuous dialogue between the industry and regulators and the development of infrastructure that supports a wide range of digital asset services.
Looking forward, Ophi envisions a dynamic and thriving crypto ecosystem in Nigeria, driven by an empowered youth population and a supportive regulatory environment.
Ophi identified several challenges that could impact the future of crypto in Nigeria. One of the primary concerns is the potential for regulatory delays or resistance.
Finally, he stressed the importance of government investment in crypto education and recommended that it be incorporated into secondary and tertiary education curricula.
“The government should have bill allocations for proper crypto education… innovations will thrive,”
Quidax’s recent licensing by the SEC represents a crucial step forward in Nigeria’s journey toward a regulated and vibrant crypto market.
However, the journey will require continued collaboration between the government, industry stakeholders, and the broader public to create a thriving and well-regulated crypto ecosystem.
About Rume Ophi
Rume Ophi, known as ‘Cryptopreacher,’ is a leading blockchain educator and advocate in Africa with over 18 years of experience in technology. He transitioned into the blockchain industry in 2018, after managing Airtel Nigeria’s network infrastructure at Huawei.
Rume has become a prominent crypto market analyst on Channels Television, Nigeria’s largest station, reaching over 1 billion global views on YouTube. As the former Executive Secretary of the Blockchain Association of Nigeria (SIBAN), he has been instrumental in promoting blockchain adoption across Africa.
In 2020, he founded the Cryptopreacher Blockchain Academy, training over 5,000 young Africans in cryptocurrency. He also launched ThinkCrypto in 2021, a U.S.-based initiative for global blockchain education, aiming to develop a robust crypto ecosystem in Africa.
