In a landmark move for Nigeria’s digital asset sector, the Securities and Exchange Commission (SEC) has granted its first provisional operating license to Quidax, an Africa-based cryptocurrency exchange. This development marks a significant step toward the formal recognition and regulation of the country’s growing crypto industry.
Quidax’s new license permits it to operate as a registered cryptocurrency exchange in Nigeria, a milestone that the company describes as a significant boost for the local crypto community. Quidax anticipates that the SEC’s approval will encourage innovation and growth in the sector.
Buchi Okoro, the co-founder and CEO of Quidax, commended the SEC’s leadership, particularly under Emomotimi Agama, for its efforts to establish order and build investor confidence in the Nigerian crypto market. With this regulatory green light, Quidax can now work alongside banks and other financial institutions, pending further approval from the Central Bank of Nigeria.
This licensing follows a comprehensive update to the SEC’s rules in June, which now include guidelines for digital asset issuance, exchange, and custody. One of the key features of the regulatory update is the Accelerated Regulatory Incubation Programme, designed to help virtual asset service providers comply with the new regulations.
Despite the progress, there were initial concerns that the stringent requirements set by the SEC could reduce the number of local crypto exchanges. For example, the SEC mandates that exchanges have a minimum capital of 500 million naira (approximately $556,620) and maintain a Fidelity Insurance Bond covering at least 25% of this capital.
Nigeria, Africa’s largest economy, has consistently ranked among the top countries globally in terms of cryptocurrency adoption. A recent survey highlighted Nigeria as the most crypto-aware nation in the world. Moreover, the 2023 Cryptocurrency Geography Report by Chainalysis placed Nigeria second in crypto adoption among 154 countries, underscoring the country’s significant role in the global digital asset ecosystem.
However, despite the high rate of adoption, the expected surge in foreign crypto investment has yet to materialize. The introduction of this new regulatory framework, along with Quidax’s licensing, may pave the way for a more stable and secure environment, potentially attracting both local and international investors.
