Is the License for Quidax a Regulatory Trap or a Sign of Hope? Perspectives from the Top Crypto Analyst in Nigeria

Posted by cryptonews Crypto News September 4, 2024 2.6k Views

The “Approval-in-Principle” for two digital asset exchanges, including Quidax Technologies Limited, has been given by the Nigerian SEC.

Under its Accelerated Regulatory Incubation Program (ARIP), the Nigerian Securities and Exchange Commission (SEC) granted “Approval-in-Principle” to two digital asset exchanges, including Quidax Technologies Limited, marking a significant decision in the nation’s cryptocurrency stance.

The approval is a precondition for full registration, which will impose strict guidelines on these platforms’ transparency and consumer protection.

The SEC’s announcement is part of its dual-track strategy involving the ARIP and the Regulatory Incubation (RI) Program. The ARIP was specifically created to onboard companies that had started their operations prior to the SEC’s May 2022 introduction of its Rules on Virtual Asset Service Providers.

On the other hand, the RI Program aims to evaluate the technological advancements and business models of digital asset companies in a regulated, real-time market setting.

The SEC hopes to ensure a controlled and safe expansion of the digital assets industry in Nigeria by regulating the increasingly popular use of distributed ledger technology (DLT) for the creation and trading of cryptocurrency assets through these initiatives.

The objective is to improve the laws and regulations that will control digital assets in Nigeria in the future, making sure that companies such as Quidax follow the strictest guidelines for consumer protection and openness.

Nigerian SEC: “Only Approved Exchanges Can Operate”

The SEC’s dual goals of promoting technological innovation and protecting investors are the foundation of its position on cryptocurrency regulation.

The SEC has made it easier for businesses that started up before the Rules on Virtual Asset Service Providers were formally released in May 2022 by introducing the ARIP.

This program is especially designed to make sure that these companies—Quidax included—follow stringent regulatory requirements.

Under strict regulatory oversight, these programs enable real-time market testing of business models related to cryptocurrencies.

The SEC’s decision to grant “Approval-in-Principle” is a cautious but progressive step. Why?

Because the groundwork for a transparent and regulated cryptocurrency trading environment has been established, even though full registration is still pending.

Notably, the SEC has explicitly stated that the only digital exchanges and platforms that can lawfully operate in Nigeria are those that have been approved.

The SEC’s interaction with the cryptocurrency market demonstrates its acknowledgement of the market’s potential to improve Nigeria’s financial system.

Although the Nigerian cryptocurrency community is thrilled about this development, numerous foreign exchanges—including the most recent OKX—have been forced offshore by previous government decisions.

Insights from Rume Ophi, Nigeria’s Leading Crypto Market Analyst

One of the most well-known individuals in Nigeria’s cryptocurrency community, Rume Ophi, was interviewed by Cryptonews to gain a deeper understanding of the ramifications of Quidax’s licensing and the direction of cryptocurrency regulation in that country.

Ophi gave the SEC credit for its efforts to create a clear regulatory framework and for actively interacting with industry stakeholders. He emphasized the significance of this interaction by pointing out

“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 stressed that approving regional platforms like Quidax is an important development because it allays earlier worries about the dominance of global platforms and potential difficulties local businesses may have in satisfying regulatory requirements.

Ophi claims that Quidax’s licensing is a significant achievement for the platform as well as the whole Nigerian cryptocurrency scene.

He was relieved and upbeat that the regulatory framework now acknowledges and supports local platforms, saying:

“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 thinks that by taking this action, more local businesses will be inspired to enter the Nigerian cryptocurrency market.

But Quidax’s achievement in obtaining this approval shows that small businesses can, in fact, compete and prosper in a regulated setting.

“It’s good so the international guys will not be the only ones controlling the entire industry.”

Implications for Crypto Adoption in Nigeria

Ophi predicts that the regulatory clarity brought about by the SEC will encourage institutional investors, fintech companies, and even traditional businesses to investigate cryptocurrency assets, which will have a positive effect on the adoption of cryptocurrencies in Nigeria.

“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.”

He contends that this will spur market expansion, improve liquidity, and give Nigerians more chances to interact with digital assets.

Ophi did, however, also emphasize the significance of education in promoting adoption. Even though Quidax has made progress in online education, he pointed out that more grassroots involvement is desperately needed.

Based on his past experiences with other platforms, he proposed that Quidax could expand its market share by implementing local initiatives akin to those that Luno had previously carried out.

“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”

Notwithstanding the encouraging advancements, Ophi outlined possible obstacles that might prevent Nigeria’s cryptocurrency sector from expanding. He drew attention to the possibility that regulatory misalignment or inertia would hinder adoption and innovation.

He issued a warning, saying that an indifferent government might hinder the uptake of cryptocurrencies and possibly push Nigeria further behind in the world’s 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,”

He advocated for more youth participation in politics, especially when it came to creating laws that would support cryptocurrencies, in order to lessen this risk.

“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 discussed the possibility of cryptocurrency exchange-traded funds (ETFs) in Nigeria, pointing out that although the idea seems good, there might be issues with the current financial structure.

He was upbeat about the future, saying that with the correct laws and backing from the government, Nigeria might develop into a center for cryptocurrency innovation.

“We have a very large population of young people who want to do great things in Nigeria.”

He thinks that building infrastructure that supports a variety of digital asset services and maintaining an ongoing conversation between the industry and regulators will be necessary to overcome these obstacles.

Looking ahead, Ophi sees a vibrant and dynamic crypto ecosystem in Nigeria powered by a supportive regulatory framework and an empowered youth population.

Ophi found a number of obstacles that might affect cryptocurrency in Nigeria in the future. Potential delays or resistance from regulators is one of the main worries.

Lastly, he emphasized the significance of public funding for crypto education and suggested that secondary and postsecondary education curricula include it.

“The government should have bill allocations for proper crypto education… innovations will thrive,”

The SEC’s recent licensing of Quidax is a significant step in Nigeria’s development into a regulated and thriving cryptocurrency market.

To build a robust and well-regulated cryptocurrency ecosystem, though, the public, industry players, and the government will need to keep working together along this journey.

About Rume Ophi

Rume Ophi, also referred to as “Cryptopreacher,” is a prominent blockchain enthusiast and educator in Africa with more than eighteen years of tech experience. In 2018, he left Huawei to manage the network infrastructure for Airtel Nigeria and entered the blockchain space.

With more than 1 billion views on YouTube worldwide, Rume has established himself as a well-known cryptocurrency market analyst on Channels Television, the biggest station in Nigeria. He has played a significant role in encouraging blockchain adoption throughout Africa as the former Executive Secretary of the Blockchain Association of Nigeria (SIBAN).

He established the Cryptopreacher Blockchain Academy in 2020, where more than 5,000 young Africans received cryptocurrency training. In 2021, he also started ThinkCrypto, an American project for blockchain education with a global focus that aims to build a strong cryptocurrency ecosystem in Africa.

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