Nigerian Government Issues New Laws To Fintech Companies

 

The massive growth of the cryptocurrency space in Africa has been primarily attributed to Nigeria’s influence- termed the giant of Africa and boasts as the continent’s economic hub. The country, alongside Kenya, remains one of the most technology-driven nations in Africa and is still one of Africa’s most crypto-adoptive nations.

Unfortunately, Nigeria’s government started to threaten the affairs of cryptocurrency trading in the nation when it instructed its banks not to allow citizens to purchase cryptocurrencies with the local currency (Naira) in January 2021. Unfortunately, the country’s FinTechs are now the latest victims of the government’s latest policies, as they have now been cut off from the usual identity verification system.

The government wants FinTechs to use a new identity system

Nigerian citizens continue to complain about its government’s harsh economic policies on social media, with many believing that the government is trying so hard to deplete its citizens of sustainable means of income. Unfortunately, the latest of such policies has now indefinitely suspended Fintechs in the country from performing a mandatory identity check on their new customers.

According to these Fintechs, the government has plans to install a new proposed identity system very soon. However, the old system’s suspension implies that they can’t register new customers except they use a peer-to-peer identity check service.

Speaking to the press, a Nigerian crypto analyst and lawyer- Opeyemi, believes that the new policy’s timing is wrong and believes that the Fintechs have been the victims of the harsh business policies of the Nigerian government. He believes that the Fintechs were the most affected by the crypto ban in January, as Commercial banks have continued to thrive.

Nigerian crypto companies are still stranded

Like every Nigerian who will now be affected by the new government policy, Opeyemi believes that it will hamper foreign investment growth in Nigeria. Opeyemi believes that the government introducing a new identity system is not a bad idea, but he feels like the crypto ban earlier in the year, the timing is wrong, as Fintechs were not given prior notice.

Before now, Fintechs and Commercial banks were always required to use the Bank Verification Number (BVN) to validate prospecting customer’s identities. Unfortunately, that rule has now changed, as FinTechs have now been disabled from using the BVN without warning, with only commercial banks allowed to use it. However, many analysts in the country believe that the government has plans to introduce the National Identification Number (NIN) to replace the BVN for validating identity.

The NIN is expected to consolidate identity into one unique number, and the Nigerian government has been trying to incorporate it into its system since late 2020. However, while that is a speculation, the Nigerian FinTechs are now the victims of a threatening business policy from the Nigerian government, which many in the country believe to threaten the operations of these FinTechs. Unfortunately, crypto companies in the country are still awaiting a new crypto regulation that will return them to business; otherwise, they are still stranded like the country’s FinTechs.

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