Over the past three months, the African digital assets sector has experienced significant industry-shaping events. Nigeria, one of Africa’s largest digital currency hubs, has been at the center of these developments, prompting stakeholders and prominent voices in the crypto community to engage in discussions about digital assets and the crucial role of government policies and regulations in the sector’s growth.
During this period, Yellow Card, a leading African crypto exchange, has also forged strategic partnerships, intensified crypto education efforts, and introduced innovative initiatives to advance digital money in Africa.
In 2021, the Central Bank of Nigeria dealt a severe blow to the thriving Nigerian cryptocurrency sector by banning financial institutions from participating in crypto transactions. Consequently, crypto activities slowed down, prompting some enthusiasts to seek alternative avenues for exchanging their assets, while others simply gave up.
Fast forward to 2023, and the crypto sector has evolved, despite experiencing several ups and downs both on the global and local scene. Governments and their financial regulatory agencies worldwide have come to realize that they cannot ignore cryptocurrencies and that regulation is the only way to effectively engage with the industry.
Despite initial resistance, the Nigerian government appears to be shifting its stance on digital currencies. Less than a month after approving the Nigerian Blockchain policy, which encouraged the development of a framework for leveraging blockchain technology for national development, the Nigerian government passed the Nigeria Finance Act 2023 in June 2023.
The Nigeria Finance Act covers a wide range of financial concerns and recognizes the potential of digital assets as a revenue source. Under the Nigeria Finance Act 2023, individuals and businesses involved in buying, selling, and trading digital assets, such as cryptocurrencies, are now subject to a 10% tax on capital gains. This means that profits earned from the disposal of digital assets will be taxable.
Another significant event that sparked discussions among crypto stakeholders is the Securities and Exchange Commission (SEC) vs. Binance Nigeria Limited saga. The SEC described Binance Nigeria Limited’s activities as illegal due to its lack of registration with the Nigeria Corporate Commission. As a result, the global office of Binance and its founder distanced themselves from Binance Nigeria. This event highlighted the need for clear and robust regulation of the Nigerian digital assets space.
To provide perspective on these recent events and activities shaping the African crypto space, several experts and brands have shared their insights on the role of cryptocurrency players and the best approaches to regulating cryptocurrencies in Africa. Mr. Peter Mureu, Marketing Director at Yellow Card Financials, commented in a recent interview on the new tax regime for digital asset holders.
He emphasized that crypto exchanges play a crucial role in enabling the taxation of crypto assets. Yellow Card understands the importance of adhering to regulatory frameworks, promoting compliance, and is actively collaborating with governments and regulators. Peter further emphasized the significance of education in fostering crypto adoption in Africa and ensuring users understand regulations and their impact on their assets.
In another interview, Lasbery Oludimu, VP Legal & Chief Data Protection Officer at Yellow Card Financials, explained that actions like the recently approved blockchain policy and the Finance Act by the Federal Government of Nigeria will pave the way for proper and robust regulation of cryptocurrencies in the country.
Aside from leading conversations on cryptocurrency regulation and advancement in Africa, Yellow Card Financials, a prominent pan-African crypto exchange, has been actively working to advance the African crypto space and empower users with tools to grow their wealth and access digital asset options.
Over the past three months, Yellow Card has completed two key partnerships aimed at enabling Africans to fully harness the potential of digital currencies, resolving cross-border payment challenges, driving education, and promoting the adoption of widely used stablecoins.
In April 2023, Yellow Card partnered with Block, the parent company of American payment services Cash App and Square, to facilitate cross-border payments between 16 African countries, including Nigeria, South Africa, and Ghana. The pan-African crypto exchange also formed a strategic alliance with Tether, the company behind the widely used stablecoin USDT. This collaboration aims to raise awareness, provide education, and foster the adoption of Tether’s stablecoin among students and young professionals in Nigeria, Kenya, and Ghana. As part of this partnership, Yellow Card has taken its crypto education initiatives to a higher level by embarking on a series of university campus tours across the continent.
With growing interest and efforts by governments across Africa to participate in blockchain and digital assets, coupled with the recent increase in innovative activities and partnerships in the African crypto scene, strong indications suggest that the next decade will witness Africa harnessing the true power of the digital economy. Ultimately, young and vibrant Africans who aspire to effectively participate in the global economy, take control of their assets, and attain financial freedom will be the true winners in this transformative journey.
