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Hello fintech friends,
Most of us have been stopped by a traffic officer at least once. He raises his hand, you slow down, and he leans into the window and asks: show me your licence. It did not matter how well you drove or how long you had used that road. If you had no papers, you had a problem.
Stablecoins in Africa have been driving for years without being stopped. Dollars moved from phone to phone, on trust, through people who knew people. It was fast, cheap and hugely popular. Licensed institutions were on the road too, but they drove beside the informal traffic, not instead of it.
This week, the officer stepped into the road. The Central Bank of Nigeria published its regulations for non-security virtual assets, and the message was short: show me the licence.
Here is what it says for the dollar on your phone. A stablecoin tied to a foreign currency can reach Nigerian users only if a Nigerian-incorporated company issues it and holds a Class 2 licence. The CBN must approve the token before issuance starts. Like a driving licence from another country, a foreign stablecoin licence does not count. The entry fee is about $11 million in paid-up capital, and algorithmic stablecoins are banned.
You cannot dodge the checkpoint by driving from outside. The rules cover activity in Nigeria and activity aimed at people in Nigeria, with or without an office on the ground. If a token grows too big, with more than about $376 million in circulation for 30 days or more than 5 million people in Nigeria holding or using it, the CBN can call it “systemic”.
The same rules also create a Class 1 licence for stablecoins tied 1 to 1 to the naira and fully backed by naira reserves. Nigeria is making room on the road for its own money too.
Now the part that made me smile. Yellow Card is the company with its papers in order. It lists Nigeria among its approvals. Last week it went to São Paulo and bought GoMoney, which is still waiting on its own Brazilian authorisation. Two continents, same lesson: in stablecoins, the licence is the road.
And remember what a yellow light means. Slow down. It does not mean stop. Nigeria did not put up a red light for stablecoins. It put up a yellow one.
Slow down, and show me the licence.
— Jovin
Please find another week of fintech news below:
The Rundown
🚀 Product Launches
WayaWaya launched WayaWaya Banking with Choice Bank, an AI-driven app for accounts, multi-currency wallets, remittances and utility payments in Kenya.
Divest launched Divest Private Banking, a multi-currency app with USD, GBP and EUR accounts and payouts to four African countries.
Rex Africa launched an AI-powered banking platform in Nigeria, led by Rex Atlas, an agent that guides saving, borrowing and investing.
KCB Tanzania integrated PayPal into its mobile app, letting customers receive international payments and withdraw balances in Tanzanian shillings.
C-Care Uganda launched cashless payments at its Kampala hospital with MTN MoMo and NexPay, as cash made up almost half of collections.
ProvidusUnity Bank enabled Google Pay for its Mastercard holders, building on its 2021 tokenisation work.
💸 Fundraises
🗂️ Other News
Safaricom reported about $448 million in half-year profit, with M-Pesa revenue at about $771 million and Fuliza revenue up 86%.
Nigeria’s central bank set about $11 million in capital for foreign stablecoin issuers, who must operate through licensed Nigerian entities.
CBN tightened P2P crypto rules, requiring specific approval for providers and a BVN name match before tokens are released.
CBN and SEC overlap on crypto capital: SEC-licensed firms need CBN capital on top, and the same funds cannot count twice.
Nigerian lawmakers proposed up to 10 years in jail for unauthorised payment data transfers abroad, plus fines from about $376,000.
Grey secured CBN approval as an international money transfer operator, with inbound transfers paid out in naira only.
Bank of Ghana flagged 20 unlicensed loan apps and warned banks and payment providers not to process their transactions.
South Sudan’s central bank and telecom regulator signed an MoU to coordinate on fintech cybersecurity, consumer protection and competition.
Circle appointed Gillian Darko, previously of Yellow Card, as Vice President and Head of Africa to lead regional expansion.
Nairobi International Financial Centre planned a fund worth about $500 million for Kenyan startups.
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Quote of the Week
Upcoming Events
Paying attention?
How many unlicensed loan apps did the Bank of Ghana flag?
a) 20 b) 12 c) 35By how much did Safaricom’s Fuliza revenue rise in its half-year results?
a) 36% b) 84% c) 86%Circle’s new Head of Africa, Gillian Darko, previously worked at which company?
a) Flutterwave b) Yellow Card c) Paystack
(The answers are in the closing remarks.)
Editor’s Picks
That’s all for today, friends. See you next Monday.
Asante.
Quiz answers: 1 (a) 20, 2 (c) 86%, 3 (b) Yellow Card.
