Nigeria's new regulations lure Blockchain.com
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After booting out offshore digital asset exchanges operating without a license and cracking down on local operators, Nigeria is once again warming up to the sector, and it's catching the eye of global giants.
The latest company to target Nigeria is Blockchain.com, the United Kingdom-based exchange and wallet that boasts 37 million users and over 85 million wallets opened since 2011. The firm, which was valued at $14 billion in its last fundraising in 2022, has cited the country's regulatory turnaround as the main factor behind its expansion.
Nigeria is Blockchain.com's fastest-growing market in the region, the firm's general manager for Africa, Owenize Odia, told Bloomberg.
'Nigeria has taken meaningful steps toward creating a clear framework for crypto,' he stated. 'Applying for a crypto-exchange license in Nigeria is a top priority.'
Nigeria has been Africa's largest digital asset market for years. However, the government has repeatedly acted against the interests of the sector. For instance, the central bank prohibited commercial banks from processing transactions related to the industry for years, a decision that was later overturned by the courts. The central bank has also consistently advised the citizens against transacting digital assets.
In 2024, the government ramped up its crackdown, leading to the exit of all offshore exchanges that had operated for years without local licenses. It also filed a lawsuit against Binance, the dominant market player, demanding $79.5 billion for economic sabotage and a further $2 billion in back taxes. However, since then, the government has embraced the industry. In 2024, it issued two provisional licenses to Quidax and Busha, two local exchanges. It has also reiterated that its problem was with Binance and the other non-compliant platforms, not the entire industry.
Most recently, the Securities and Exchange Commission (SEC) noted that it's reviewing applications from a few other platforms, including Yellow Card, and intends to issue new licenses later this year.
'For us, it is a learning process and the idea is to study, to observe what they do, how they do it and what are the risks involved. We are working to develop more people, train more people to build capacity for the regulation of digital assets,' SEC Chair Emomotimi Agama noted.
Beyond Nigeria, Blockchain.com intends to expand to Ghana, South Africa, and Kenya, the other major digital asset hubs in Africa. Of the three, South Africa has the most advanced Bitcoin regulations and has licensed over 200 virtual asset service providers (VASPs), the highest number on the continent.
But even in South Africa, industry stakeholders say there's still a long way to go. In March, local exchanges called on regulators to classify digital assets as onshore assets, which could unlock billions in capital and accelerate growth.
Watch: Blockchain is changing Nigeria's tech city ecosystem
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