Central Bank of Nigeria Tightens Grip on Crypto: New Forex Rules Impact Bitcoin (BTC) and Ethereum (ETH)

• The Central Bank of Nigeria (CBN) has imposed new regulations on Bureau de Change (BDC) operators.
• Capital requirements for BDC operators have been increased.
• The BDC Operators Union has requested lower thresholds and an extended timeline.

The CBN has tightened regulations on Bureau de Change (BDC) operators and outlawed street trading in foreign currency to stabilize the Naira and curb speculative activities.

New Capital Requirements for BDC Operators

The CBN has significantly increased the capital requirements for BDC traders, emphasizing the necessity to regulate and safeguard the value of the Naira. The capital qualification for tier-one BDC operators has been raised to 2 billion Naira ($1.4 million), while tier-two operators must now meet a mandatory requirement of 500 million Naira, up from 35 million Naira. BDC operators must comply with this new guideline within six months.

BDC Operators Union’s Response

In response to this new regulation, the BDC Operators Union has requested that authorities reconsider the revised requirements and extend the compliance timeline. The union argues that the increased thresholds are too stringent and could negatively impact smaller operators.

Impact on Cryptocurrency Trading

These measures come amidst a broader crackdown on cryptocurrency trading in Nigeria, with authorities blaming the Naira’s decline on exchange platforms. The Naira has weakened significantly against the dollar, prompting regulatory actions against platforms like Binance Holdings Ltd.

Detention of Binance Executives

Two executives of Binance Holdings Ltd. were detained during their visit to Nigeria in February. The Nigerian authorities detained the directors for alleged involvement in facilitating tax evasion through the Binance platform. While one escaped, the other has remained in custody since April.

Conclusion

The CBN’s new regulations on BDC operators and the crackdown on cryptocurrency trading are part of a broader effort to stabilize the Naira. While these measures aim to curb speculative activities and safeguard the currency’s value, they have also sparked concerns among BDC operators and cryptocurrency platforms. The coming months will reveal the effectiveness of these regulations and their impact on Nigeria’s financial landscape.