In 2017, Franklin Peters launched Bitfxt, a Nigerian crypto startup aimed at offering a payment gateway, remittance service, and trading platform. By 2019, it processed millions of transactions. However, a major setback occurred when the Central Bank of Nigeria banned banks from facilitating crypto transactions in early 2021, forcing many exchanges, including Bitfxt, to shut down. Over the years, competing international exchanges and a volatile regulatory environment made survival difficult for local startups. Despite the challenges, some companies adapted, introducing peer-to-peer platforms and looking for compliance solutions. With Nigeria lifting the crypto ban in 2023, the future now leans toward innovation and better regulatory clarity in the crypto space.
In 2017, Franklin Peters launched Bitfxt, a Nigerian crypto startup aimed at simplifying crypto transactions in a country eager to join the digital currency movement. By 2019, Bitfxt was thriving, processing millions of transactions yearly. However, on February 5, 2021, a regulatory bombshell from the Central Bank of Nigeria (CBN) halted its progress by banning banks from facilitating crypto transactions. This left many local exchanges struggling to adapt, and for Bitfxt, it was a game-changer.
The CBN ban shook the foundations of a burgeoning crypto Market. While some exchanges attempted to pivot their business models, the restrictions forced many, including Bitfxt, underground. As demand surged during the 2017 bull Market, Nigerians found it challenging to buy Bitcoin directly with Naira. This gap allowed Bitfxt to flourish, providing a much-needed platform for crypto trading that earned revenue through token listing fees and transactions.
However, the shaky regulatory environment made it tough for Bitfxt to secure funding and retain profitability. Peters noted the difficult hiring landscape, as local blockchain talent preferred stable Web2 jobs over the risks associated with crypto. As foreign exchanges entered the Nigerian Market, Bitfxt struggled to compete, leading to a failed funding round in 2020.
Following the CBN’s ban and the fallout it caused, Peters rebranded Bitfxt to Boundlesspay, aiming for a fresh start. Yet, the challenges persisted, as banks remained wary of crypto transactions, making it difficult for startups to operate.
In December 2023, Nigeria finally lifted its crypto ban, prompting a reexamination of the local landscape. While some startups folded under pressure, the lifting of restrictions sparked new hope for surviving companies. However, banks still tread cautiously, and the need for compliance is more crucial than ever.
For the future, crypto startups in Nigeria must navigate a complex landscape filled with both risks and opportunities. They have to leverage blockchain technology while ensuring that they comply with regulatory standards. Only through innovation and adaptation can they thrive in this revived Market.
Tags: crypto in Nigeria, Bitfxt, Boundlesspay, CBN ban, cryptocurrency compliance, Nigerian fintech news, blockchain innovation
What was the 2021 crypto ban in Nigeria?
In 2021, Nigeria’s government banned banks and financial institutions from dealing with cryptocurrencies. This move aimed to control the growing crypto Market in the country.
How did the ban affect crypto startups?
The ban severely affected many crypto startups in Nigeria, making it difficult for them to operate. They lost access to banking services, which are essential for transactions and business operations.
What changes did startups make to survive?
To adapt, some startups shifted to peer-to-peer trading and sought global partnerships. Others focused on education, helping users understand crypto while looking for alternative funding options.
Is the crypto Market still active in Nigeria?
Yes, despite the ban, the crypto Market remains active. Many Nigerians continue to trade cryptocurrencies through informal channels, showing strong interest and demand.
What steps is the government taking now?
The Nigerian government is exploring regulations for cryptocurrencies rather than outright bans. They aim to bring structure and oversight to the Market while still addressing concerns about security and fraud.
