One thing that stands out about the Central Bank of Nigeria (CBN), under the leadership of Mr Godwin Emefiele, is its ambivalence towards digital financial services and technology (fintech for this article).
The CBN has responded to growing fintech innovation in the past nine years with several enabling initiatives. Some of these include publishing regulatory frameworks and licensing requirements to ensure Nigeria’s financial system stability, developing the Shared Agent Network Expansion Facility (SANEF) to boost mobile money and supporting open banking in Nigeria.
Simultaneously, the CBN has also come down hard with the hammer. It came for wealth management apps, neobanks, cryptocurrencies (crypto), and recently revoked licenses of 132 microfinance banks, including some of our beloved fintech startups.
The crypto ban is noteworthy because Nigeria has consistently led cryptocurrency adoption globally. A survey in 2020 found that Nigerians were the most likely to have used or owned cryptocurrency out of a sample of 74 countries. And the country has consistently ranked amongst the top 20 of the global adoption Index by Chainalysis, a blockchain data and intelligence company. The country has also birthed crypto startups like Nestcoin that raised large amounts at the pre-seed/seed stage.
In many ways, the crypto ban was damning and affected the burgeoning cryptocurrency space in Nigeria and sent some crypto startups taking refuge in other crypto-friendly markets.
Against this backdrop, the Nigerian government, through the Federal Ministry of Communications and Digital Economy (FMC&DE),