The Road to Cryptocurrency Regulation in Africa and Yellow Card Progress for Advancement of Digital Money

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, encouraging stakeholders and prominent voices in the cryptocurrency community to join the discussion on digital assets and the critical role of government policy and regulation in the growth of the sector.

During this period, Yellowcard, Africa’s leading cryptocurrency exchange, has also forged strategic partnerships, stepped up its cryptocurrency education efforts, and introduced innovative initiatives to advance digital money in Africa.

In 2021, the Central Bank of Nigeria has dealt a severe blow to Nigeria’s thriving cryptocurrency sector by banning financial institutions from participating in cryptocurrency trading.

As a result, cryptocurrency activity slowed down, prompting some enthusiasts to seek alternatives to exchange their assets, while others simply gave up.

Fast forward to 2023 and the crypto sector has evolved despite experiencing some ups and downs both globally and domestically.

Governments and financial regulators around the world have come to realize that cryptocurrencies cannot be ignored and regulation is the only way to effectively engage with the cryptocurrency industry.

Despite initial resistance, the Nigerian government appears to be changing its stance on digital currencies.

Less than a month after approving the Nigerian Blockchain Policy, which encourages the development of frameworks that utilize blockchain technology for national development, the Nigerian government passed the Nigerian Finance Act 2023 in June 2023.

The Nigerian Finance Act covers a wide range of financial concerns and recognizes the potential of digital assets as a source of income. Under the Nigerian Finance Act 2023, individuals and companies engaged in the buying, selling and trading of digital assets such as cryptocurrencies will be subject to a 10% tax on capital gains. This means that profits derived from the disposal of digital assets are taxable.

Another significant event that has sparked debate among cryptocurrency circles is the Securities and Exchange Commission (SEC) vs. Binance Nigeria Limited battle. The SEC said the activities of Binance Nigeria Limited are illegal due to its lack of registration with the Nigerian Companies Commission.

As a result, Binance’s global offices and its founders have distanced themselves from Binance Nigeria. The event highlighted the need for clear and robust regulation of the digital asset sector in Nigeria.

To provide perspective on these recent events and activities shaping the African cryptocurrency space, multiple experts and brands shared their insights on the role of cryptocurrency players and the best approach to regulating cryptocurrencies in Africa.

Peter Mureu, director of marketing at Yellow Card Financials, commented on the new tax regime for digital asset holders in a recent interview.

He emphasized that cryptocurrency exchanges play a key role in enabling the taxation of crypto assets. Yellow Card understands the importance of adhering to regulatory frameworks and promoting compliance, and actively cooperates with governments and regulators.

Peter further emphasized the importance of education in facilitating cryptocurrency adoption in Africa and ensuring users understand the regulation and its implications for assets.

In a separate interview, Raspberry Ordim, vice president of legal affairs and chief data protection officer at Yellow Card Financials, explained that measures such as the recently approved blockchain policy and the Nigerian federal government’s financial legislation will pave the way for proper and robust regulation of cryptocurrencies in the country.

In addition to leading the discussion on crypto regulation and advancement in Africa, Yellow Card Financials, a prominent pan-African cryptocurrency exchange, has been actively working to advance the African crypto space and provide users with the tools to increase their wealth and access digital asset options.

Yellowcard has completed two significant partnerships in the past three months aimed at enabling Africans to harness the full potential of digital currencies, solving cross-border payments challenges, promoting education and facilitating the adoption of widely used stablecoins.

In April 2023, Yellowcard 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 cryptocurrency exchange has also entered into a strategic alliance with Tether, the company behind the widely used stablecoin USDT.

The collaboration aims to raise awareness, provide education and promote adoption of the Tether stablecoin among students and young professionals in Nigeria, Kenya and Ghana.

As part of this partnership, Yellowcard has taken its crypto education efforts to the next level by embarking on a series of university campus tours across the continent.

The growing interest and commitment of governments across Africa to participating in blockchain and digital assets, coupled with the recent increase in innovative activity and partnerships in the African cryptocurrency scene, suggest strong indications that Africa will harness the true power of the digital economy over the next decade.

Ultimately, young and vibrant Africans who want to participate effectively in the global economy, control their own assets and achieve financial freedom will be the real winners in this transformational journey.