Welcome to the December regulatory round up. We provide you with the latest regulatory news and insights across Nigeria, Africa and beyond. Let’s dive into a thoughtful and comprehensive update on recent developments.
News in Nigeria
FCCPC Engages GT Bank, MTN and Air Peace over Possible Violations.
CBN imposes ₦1 billion fines on Moniepoint and OPay as Nigeria strengthens fintech regulations.
NDIC Calls on Nigerian Financial Institutions to Adopt AI for Fraud Detection.
SEC Introduces New Registration Requirement for Capital Market Operators.
Juicyway, a Nigerian startup, secures $3 million to address FX shortages for businesses.
FCMB Secures N147.5bn Through Public Offer, Achieves CBN’s Revised Capital Requirement.
News in Nigeria
FCCPC Engages GT Bank, MTN and Air Peace over Possible Violations
The FCCPC is investigating complaints against banks, telecoms, and aviation companies over poor service, exploitative practices, and consumer rights violations. For fintechs, this signals heightened scrutiny of customer experience, transparency, and service reliability. Cases like GTBank’s network issues and MTN Nigeria’s data service probe highlight the need for resilient tech infrastructure and operational consistency. Fintechs must prioritize compliance and service quality to avoid penalties and reputational risks.
CBN imposes ₦1 billion fines on Moniepoint and OPay as Nigeria strengthens fintech regulations.
The Central Bank of Nigeria (CBN) imposed ₦1 billion fines on Moniepoint and OPay during Q2 2024 following compliance audits conducted earlier in the year. These penalties stem from routine regulatory reviews, reflecting the CBN’s heightened scrutiny of the growing fintech sector. With OPay boasting 40 million users and Moniepoint processing 5.2 billion transactions in 2023, their rapid growth has naturally attracted increased regulatory attention. This underscores the critical need for proactive measures in regulatory compliance, robust internal controls, and a thorough understanding of licensing requirements to avoid operational disruptions and financial penalties.
NDIC Calls on Nigerian Financial Institutions to Adopt AI for Fraud Detection.
The Nigeria Deposit Insurance Corporation (NDIC) has emphasized the importance of integrating Artificial Intelligence (AI) technologies to combat rising fraud within the financial sector. These AI tools can help fintech companies by processing large datasets, identifying irregular transactions, and minimizing false positives, ultimately improving fraud detection and operational efficiency. With a significant increase in fraud cases, fintechs will likely face higher regulatory expectations, which could include the adoption of AI-based monitoring solutions as part of licensing requirements.
SEC Introduces New Registration Requirement for Capital Market Operators
Starting in 2025, the SEC will require capital market operators (CMOs) to submit trade group receipts for annual registration renewal. This underscores the importance of aligning with industry standards and maintaining compliance. While this measure is expected to boost investor confidence, it also introduces additional administrative responsibilities.
The Nigerian government has proposed a series of Tax Reform Bills that consolidates several tax laws into one framework. Key changes include a revised personal income tax structure with lower rates for lower income levels, the introduction of rent relief in place of Consolidated Relief Allowance, and exemption of compensation or damages under ₦50 million from chargeable gains.
The Nigerian Financial Intelligence Unit (NFIU) has issued updated guidelines on suspicious transaction reporting (STR), emphasizing proactive compliance and accuracy in identifying illicit activities. Financial institutions must now review flagged transactions within 72 hours and file STRs within 24 hours of completing the internal review, rather than upon forming a suspicion. Non-reported transactions must still be documented for regulatory reviews, while transaction monitoring systems (TMS) must undergo regular updates to ensure efficiency. The guidelines provide clear criteria for identifying suspicious activities, including high-risk offenses, red flag indicators, and risk-based approaches, promoting precision and reducing vulnerabilities to financial crimes.
The Central Bank of Nigeria (CBN) has introduced a ₦100,000 daily withdrawal limit per customer for Point-of-Sale (PoS) transactions, aimed at enhancing financial transparency, reducing illicit financial flows, and promoting cash transaction traceability. While supporting the shift toward a cashless economy, the policy also addresses the misuse of agency banking outfits for financial crimes. Immediate implementation poses compliance challenges, particularly in areas with weak digital infrastructure. To mitigate this, the CBN is urging banks to improve ATM reliability as a cash withdrawal alternative.
NITDA Warns Nigerians of Malware Targeting Banking Information.
NITDA’s Computer Emergency Readiness and Response Team has issued a warning about a new version of the Grandoreiro malware, which poses a major threat by stealing banking credentials and personal data through advanced techniques like screen overlay attacks and remote device control. The malware spreads via phishing emails and fake websites, tricking victims into downloading malicious software disguised as legitimate updates or documents. Once installed, it bypasses security controls, enabling unauthorized access to users’ devices.
The National Council for Arts and Culture (NCAC) and the National Information Technology Development Agency (NITDA) have partnered to launch BuyNigeria.ng, an eCommerce platform aimed at promoting Nigerian artisans and traders globally. The initiative, starting in cities like Lagos, Kano, Aba, and Abuja, seeks to combine Nigeria’s cultural heritage with tech innovation to boost digital visibility for local businesses.
Across Africa
Kenya parliamentproposes an 8-year bank capital deadline.
Kenya’s Central Bank has proposed increasing the minimum capital for commercial banks from KSh 1 billion ($7.7 million) to KSh 10 billion ($77.8 million) to boost resilience against risks like cyber fraud and economic shocks. While the move is necessary, smaller banks raised concerns over the three-year compliance deadline, leading to an extension of up to eight years.
Kenya’s MSEA hacked, government information allegedly sold on dark web.
Kenya’s Micro and Small Enterprise Authority (MSEA) experienced a major data breach, with hackers exposing sensitive government and organizational data on the dark web. The leaked information, including employee records, financial statements, and business registration details, is reportedly being sold for $100,000.
Rwanda has launched a new five-year strategy for advancing its fintech sector.
Rwanda has launched a five-year Fintech Strategy (2024-2029) to become a leading financial services hub in Africa. The plan aims to grow the fintech sector to 300 companies, create 7,500 jobs, and achieve 80% fintech adoption by 2029.
Kenyan banks agree to lower interest rates under pressure from the Central Bank.
Kenyan commercial banks will begin reducing lending rates in December 2024 following pressure from the Central Bank of Kenya (CBK). This follows a 75 basis point reduction in the CBK’s benchmark rate to 11.75%, the lowest since the COVID-19 pandemic. Despite three consecutive rate cuts, lending rates have increased, averaging 17.15% in October.
Across the World
European Central Bank Advances Plans for Potential Digital Euro in Latest Progress Report
The European Central Bank (ECB) has made significant strides in preparing for a digital euro, updating its rulebook to standardize payments and establishing work streams on user experience and risk management. User research, including surveys, will guide the design, with results expected by mid-2025. The ECB is also developing methodologies for holding limits, balancing user convenience and monetary policy, with a decision on issuance pending legislative approval and further analysis by 2025.
The Federal Deposit Insurance Corporation Advocates for Greater Transparency in Bank-FinTech Collaborations
The Federal Deposit Insurance Corporation has extended the commentary period for its proposed rule on ledger transparency and data standardization, aimed at improving record-keeping for bank deposits held by third-party non-bank entities. Prompted by the Synapse bankruptcy, the rule would require FDIC-insured banks to track and reconcile custodial accounts daily and identify individual fund owners. While some companies, like Paxos, worry about operational burdens, the FDIC stresses the need for enhanced consumer protection and clarity in bank/FinTech partnerships.
World Bank disburses $1.5 billion loan to Nigeria following subsidy removal and tax reforms.
The World Bank has disbursed $1.5 billion to Nigeria under the RESET initiative, following reforms like fuel subsidy removal and tax policy updates. The loan is split into two $750 million tranches, with the first released in July 2024. Key reforms include full fuel market deregulation and the introduction of the Nigeria Tax Bill 2024. This loan is part of a $6.95 billion package secured by Nigeria under President Tinubu’s administration, with further loans expected in 2025 for education and social programs.
Crypto Scoop
MiCA-Compliant Stablecoins Dominate European Market Amid Expanding Regulations
The European crypto market is transforming under the Markets in Crypto-Assets (MiCA) regulation, fully implemented by December 2024, which has driven the dominance of MiCA-compliant euro-backed stablecoins like Circle’s EURC, Societe Generale’s EURCV, and Banking Circle’s EURI, holding 91% of the market. Exchanges like Binance and Coinbase play key roles in promoting MiCA-compliant stablecoins, with Binance listing EURI and Coinbase adjusting its services to align with MiCA standards. These developments position regulated stablecoins as vital to Europe’s digital economy.
MiCA Poses Uncertainty for USDT’s Future in Europe with Potential Ban on the Horizon
Tether’s USDT faces scrutiny in the EU as MiCA regulations near full implementation on December 30, 2024. Coinbase has preemptively delisted USDT due to compliance concerns, while Binance and Crypto.com continue to trade it, awaiting regulatory clarity. MiCA’s stringent requirements, including e-money licenses and independent reserves, leave USDT’s future uncertain, potentially impacting market liquidity. European traders may shift to alternatives like Circle’s USDC, but this transition could introduce frictions, underscoring the need for regulatory alignment during MiCA’s transitional phase.
MoroccoPrepares Cryptocurrency Regulation as Central Bank Explores Digital Currency
Morocco is moving forward with plans to regulate cryptocurrency use through a draft law, despite having banned cryptocurrencies since 2017. Cryptocurrencies continue to be used in underground markets, prompting the government to introduce formal oversight. Alongside regulating cryptocurrencies, the central bank, BAM, is also exploring the possibility of launching a Central Bank Digital Currency (CBDC) to offer a secure, regulated alternative. The CBDC could promote financial inclusion and support public policy goals, positioning Morocco as a regional leader in digital financial technologies while addressing risks associated with unregulated crypto use.
Mergers and Acquisitions
TotalEnergies is set to acquire Germany’s VSB Group.
Access Bank expands its footprint with the full acquisition of South Africa’s Bidvest Bank.
Host Africa announces plans to acquire Nigerian web hosting company GO54.
Deals and Raises
Nigerian fintech Billboxx secures $1.6 million in pre-seed funding from Norrsken.
Eyone raises $1 million to scale digital health services in West Africa.
Juicyway, a Nigerian startup, secures $3 million to address FX shortages for businesses.
FCMB Secures N147.5bn Through Public Offer, Achieves CBN’s Revised Capital Requirement.
Join the Conversation:
Have questions or insights about the regulatory landscape in your region? Reach out to us on any of our social media handles, email and we would be available to help. Also share your thoughts in the comments below and let’s continue the conversation! Please note that the information provided in this article does not constitute legal advice and should not be construed as such. For legal advice specific to your situation, please consult a legal practitioner.
Welcome to the November regulatory round up. We provide you with the latest regulatory news and insights across Nigeria, Africa and beyond. Let’s dive into a thoughtful and comprehensive update on recent developments.
Regulatory Update in Nigeria
Momo PSB is Set to Rival Opay and Paystack in the Market.
Commercial, Merchants and Non-Interest banks (CMNIBs) to Accept and Trade ITFCs Under New CBN Guidelines.
CBN Reports Increased Demand for Long-Term Securities Amid Rising Inflation.
Opay has Launched the Large Transaction Shield to Protect Users from Financial Fraud.
CBN Launches Initiatives to Drive Financial Inclusion.
Moniepoint Set to Disrupt Nigeria’s Financial Industry with Commercial Bank License.
Pomelo Launches a Secure tool for international Money Transfers.
Faber Launches Third VC fund with $34m First Close, Aims for $64m
Stanbic, Cardinalstone, 8 others Trade 55% of Equities in NGX..
Raknida Secures a $100,000 Grant to Support its Expansion into the US Market.
Ariika Raises a $3 million Series A Extension to Drive its Expansion Across the MENA Region.
News in Nigeria
Commercial, Merchants and Non-Interest banks (CMNIBs) to Accept and Trade ITFCs Under New CBN Guidelines
The Central Bank of Nigeria has introduced the Foreign Currency Disclosure, Deposit, Repatriation, and Investment Scheme, 2024. This scheme encourages Nigerian citizens, both within and outside the country, to voluntarily disclose and repatriate internationally tradable foreign currencies. This initiative aims to enhance transparency in foreign currency holdings and foster economic stability while ensuring regulatory compliance.
Opay has Launched the Large Transaction Shield to Protect Users from Financial Fraud
OPay has introduced the ‘Large Transaction Shield’ to tackle rising fraud risks in digital financial transactions. This feature allows users to set transaction limits between ₦100,000 and ₦300,000. Once the limit is reached, facial verification is required to approve the transaction, with an OTP as a backup if the facial recognition fails. This addresses the growing fraud risk and gives customers more control over high-value transactions. With ₦42.6 billion lost to fraud in Nigeria in Q2 2024, this multi-layered security approach is crucial. By combining biometric authentication with customizable transaction limits, OPay sets a strong precedent for financial institutions to adopt similar measures.
CBN LaunchesInitiatives to Drive Financial Inclusion
The CBN has unveiled three key initiatives at the second edition of the International Financial Inclusion Conference: the Women Financial Inclusion Dashboard, the Women Entrepreneurs Finance Code, and the Roadmap for the financial inclusion of Forcibly Displaced Persons (FDPs). These initiatives are aimed at reducing financial exclusion among women, youth, and displaced individuals, with a focus on empowering women-owned MSMEs and enhancing economic independence for FDPs.
Moniepoint Set to Disrupt Nigeria’s Financial Industry with Commercial Bank License
Moniepoint, one of Nigeria’s leading fintech unicorns, is seeking a commercial banking license from the Central Bank of Nigeria (CBN),a strategic move that should inspire other fintechs. This could set a precedent for other fintechs riding on microfinance bank licences as their deposits and market spread continue to increase relative to their shareholder capital.Moniepoint’s expansion into loans, savings, and investments highlights how fintechs can drive growth by blending innovation with outreach. By leveraging technology and agent networks, it scales financial inclusion while reshaping the market with diverse, impactful solutions.
Cash scarcity poses serious detrimental effects to the economy, particularly for Small and medium scale businesses, relying heavily on cash transactions. The Central Bank of Nigeria (CBN) has reminded deposit money banks (DMBs) to ensure responsible cash distribution. DMBs facilitating the flow of mint banknotes to cash hawkers or engaging in cash hoarding will face penalties, starting with a 10% fine on the value of seized cash. Banks are urged to implement internal controls and prioritize cash distribution via ATMs.
Concerns Emerge Over Proposed Investment and Securities Bill of 2024
The proposed Investment and Securities Bill of 2024 presented at the National Assembly has faced opposition from key stakeholders. The Central Bank of Nigeria (CBN) raised concerns about the SEC’s expanded powers, particularly over financial institutions under its jurisdiction, and objected to provisions allowing cash transactions for securities, citing anti-money laundering laws. Finance Minister Wale Edun also warned that the bill could limit the Ministry of Finance’s oversight role, particularly regarding market updates and SEC board appointments. Despite these concerns, SEC’s Director-General defended the bill, highlighting its potential to position Nigeria’s capital market globally. Other stakeholders like PENCOM and the Nigeria Deposit Insurance Corporation supported the bill, with the Senate Committee on Capital Markets promising to incorporate feedback before the final draft is presented.
Nigerian Communications Commission to Introduce Maximum Tariff Plan Limit for Telecom Operators
The Nigerian Communications Commission (NCC) has announced plans to introduce a new policy limiting telecom operators to seven tariff plans each, aiming to simplify the telecom market and improve transparency. This move follows concerns over consumer confusion caused by an overwhelming number of options, with some operators offering up to 145 data and 27 voice plans. The Director of the Consumer Affairs Bureau, explained that the initiative would help consumers make informed decisions by reducing complexity. The NCC will also launch awareness campaigns on data usage, encouraging consumers to monitor their consumption and adjust settings to manage data effectively. This effort aligns with the NCC’s goal of promoting consumer education and enhancing the telecom experience in Nigeria.
Country-Wide Application of the National Lottery Act 2005 Declared Unconstitutional by the Supreme Court
The Supreme Court has nullified the National Lottery Act 2005, ruling it unconstitutional as it exceeded the legislative powers of the National Assembly. The court held that lottery and games of chance fall outside the Exclusive Legislative List, granting states exclusive authority to regulate and control such matters. Companies who were previously regulated under the National Lottery Act of 2005 by the National Lottery Regulatory Commission (NLRC) operating outside the Federal Capital Territory (FCT), the immediate consequence of the Court’s ruling is the invalidation of their licenses issued by the NLRC. The judgment declared that the regulation of lottery businesses falls within the residual powers of state governments rather than the federal government, meaning that businesses licensed under the NLRC no longer hold valid authority to operate in states outside the FCT. This raises a critical issue for companies that had been relying on NLRC-issued licenses to conduct business in various states. In effect, these businesses must cease operations under the old federal framework and instead seek new licenses from the relevant state authorities in each jurisdiction where they operate.
The Central Bank of Nigeria (CBN) raised the Monetary Policy Rate (MPR) by 25 basis points to 27.50% during its November 2024 Monetary Policy Committee meeting, citing persistent inflation, which stood at 33.87% in October. Governor Olayemi Cardoso emphasized that while headline inflation had shown signs of moderation, core inflation remained high due to structural factors like energy costs and food price pressures. This adjustment underscores the CBN’s focus on controlling inflationary pressures while navigating complex macroeconomic challenges.
CBN ReportsIncreased Demand for Long-Term Securities Amid Rising Inflation
The CBN’s Q2 2024 report highlights a shift toward longer-term government securities as investors hedge against rising inflation, which hit 34.19%. To attract investors, the CBN raised yields, with NTB stop rates averaging 18.47% (up from 11.97%) and FGN Bond marginal rates increasing to 20.37% (from 17.73%). Robust Open Market Operations (OMO) participation also saw allotments soar to N4.36 trillion with stop rates of 20.62%. These measures reflect the CBN’s inflation-focused monetary policy to stabilize markets and ensure competitive returns for investors.
MoMo PSB is Set to Rival OPay and Paystack in the Market
MTN Nigeria’s MoMo Payment Service Bank (PSB) is applying for Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licenses, signaling a shift in telecom-led financial services. With these licenses, MoMo can process payments and manage terminal infrastructure, offering more versatile payment solutions for merchants and customers. This move strengthens competition with banks and fintechs, redefining PSBs by blending financial inclusion with advanced digital payments. Businesses must adapt to or leverage this evolving payment landscape.
The Cyber attack on Uganda’s central bank, in which hackers stole millions, offers critical lessons on cybersecurity for financial institutions. First, the breach highlights the need for enhanced security protocols, particularly in preventing unauthorized access through improved intrusion detection systems and encryption methods. Regular security audits, penetration testing, and employee training on cybersecurity are also crucial in preventing attacks, as human error or insider threats often play a significant role in such breaches. Banks should also be vigilant in managing third-party risks, ensuring vendors comply with the same stringent security measures. Additionally, transparent communication during a crisis, as seen with Uganda’s central bank, helps maintain trust with stakeholders and the public. By adopting a comprehensive cybersecurity strategy, banks can better safeguard their systems and avoid similar incidents.
Ethiopia National Bank MandatesAdoption of QR Code Payment Standards for PSPS
The Ethiopian digital payment landscape has witnessed significant development since the inception of the national digital payment strategy in 2021. In a bid to consolidate efforts made so far, the country’s National bank issued a circular mandating the adoption of its Interoperable QR code payment standards, released earlier in April, this year. The adoption of the standards, which seek to harmonise QR code payment systems in the country, ensures seamless and hitch-free mobile payment transactions for customers in the country, invariably representing an opportunity for the payment services industry, with projections estimating as much as a 300% increase in volume of digital payment transactions after successful implementation.
Kenya’s Central Bank to ReviewInterest Rate in December
The Monetary Policy Committee of the Kenyan central bank will convene for its rate-setting meeting on December 5. In its previous meeting in October, the bank reduced its benchmark lending rate from 12.75% to 12.00%, a decision intended to encourage more credit flow to the private sector.
BNPLs to be Regulated by Kenya’s Central Bank in New Bill
Regulators around the world have paid significant attention to the Buy Now Pay Later (BNPL) schemes, with countries especially in the EU making major legislative attempts at regulating the sector. Kenya legislators seemed to have taken a cue from this in its recent Business Laws (Amendment) Bill 2024. The bill essentially seeks to address some of the consumer protection concerns raised by stakeholders, particularly regarding the usage of BNPL models to perpetrate unfair trade practices.
Kenya’s latest proposed tax legislation, Tax Law Amendment Bill has been introduced on the floor of the country’s national assembly. The bill seeks to raise the government’s revenue with key revisions to the current tax categories. The bill comes with significant tax obligations particularly for non-resident businesses and individuals, digital businesses and air travel users, amongst others, with proposed tax deductions and exemptions for certain agricultural products and employee income.
Stronger IT Risk Management Requirements for South African FI’s as New Regulation Takes Effect
The Information Technology governance and risk management landscape for financial institutions (FIs) in South Africa is set to take a new phase with the coming into force of the Joint Standard on IT Governance, and Risk Management for Financial institutions, released last year. Amid rising cybersecurity threats, the Standard mandates stronger measures to mitigate third-party risks, build resilient IT systems, and enhance incident reporting.Compliance with these new standards ultimately would require collaborative and proactive efforts particularly for governing bodies, senior management and the IT departments of financial institutions.
Zimbabwe Introduces Data Controller Licensing Requirement for Whatsapp Group Administrators
Zimbabwe’s government has indicted plans to mandate WhatsApp group administrators to obtain licences from the Postal and Telecommunications Regulation Authority (POTRAZ) to curb misinformation and promote accountability, with licence fees ranging from $50 to $2,500, depending on the number of group members. This requirement is however expected to apply only to group administrators processing personal data for commercial purposes.
Mama Moneys WhatsApp-powered bank card, launched with Pick n Pay and Access Bank, highlights the rise of social finance in South Africa. Targeting the unbanked and underserved, it offers banking services like purchases, ATM withdrawals, and international transfers via WhatsApp for R99 upfront and R25 monthly. Regulators are increasingly supportive of tech-driven solutions like this, as this move not only boosts financial inclusion but also breaks down barriers like limited access to bank branches, which enhances financial inclusion while addressing barriers such as high fees and limited access to traditional banks.
Egypt Plans to introduce card tokenisation in 2025 to enhance the security of digital payments.
The Central Bank of Egypt (CBE) plans to introduce card tokenisation by 2025, replacing sensitive card details with unique digital tokens to enhance payment security and reduce fraud. This aligns with global and regional fintech trends, such as Nigeria’s AfriGo initiative, which focuses on secure digital payments.
Across the World
TikTok Canada to Shutdown Over National Security Concerns
The Canadian government’s decision to wind up TikTok Canada, driven by national security concerns linked to its parent company ByteDance, raises interesting questions about the nature of corporate exits. While the winding-up order signals regulatory action, it doesn’t necessarily mean TikTok is leaving the market entirely. If TikTok remains available in app stores and continues to be taxed in Canada, the process may be more symbolic than substantive. This highlights the ambiguity in the approach as to whether it’s addressing the security issues at hand or merely serving as a regulatory gesture without significant operational impact.
UK Unveils Corporate Strict Liability Offence for Failing to Prevent Fraud
As the global legal and policy framework on financial crimes prevention continues to evolve, the UK appears to have taken yet another lead with the recent release of its new guidance on the failure to prevent fraud offences. Under the guidance, large organisations will now be liable for fraudulent acts of their associates intended to benefit the organisation or its clients, provided that adequate fraud prevention measures were not put in place by the organisation. Additionally, the guidance equally sets 6 fraud prevention principles that organisations could rely on to demonstrate adequate fraud risk prevention measures, with an effective date of September 2025 for the rules to take effect.
NatWest and Mastercard IntroduceMobile Virtual Card Payment Solution for Businesses
NatWest has teamed up with Mastercard to launch Approval2Buy with Mobile Virtual Cards, a new mobile payment solution for businesses. The service, the first of its kind in Europe, allows companies to issue virtual cards to employees for global use, eliminating the need for physical cards.
International Organization of Securities Commissions (IOSCO) Introduces Roadmap for Enhancing Online Safety for Retail Investors
The International Organization of Securities Commissions (IOSCO) has launched a Roadmap for Retail Investor Online Safety to address the growing risks of fraud, misinformation, and excessive risk tied to technological advances in digital trading and social media. This initiative aims to protect retail investors globally by promoting enhanced investor education and stronger regulatory frameworks. For member countries, the Roadmap will be implemented through their local Securities and Exchange Commissions (SEC) and Capital Market Authorities. In Nigeria, SEC-regulated entities can expect tighter regulations, including enhanced oversight of digital platforms, stronger investor education, and transparency measures, all aimed at improving protection and fostering a safer online investment environment.
Mastercard’s plans to replace physical card numbers and passwords with biometric authentication by 2030 are set to revolutionize online shopping. This innovation combines tokenization with biometrics to ensure secure, seamless transactions, addressing the rising fraud rates in digital payments, which are seven times higher than in-store fraud. Tokenization alone has already boosted global merchant sales by $2 billion monthly. As online security evolves, Visa’s plans to enhance fraud control with similar innovations could signal a need to revisit the EMV (Europay, Mastercard, and Visa) standard. The EMV system, which primarily focuses on securing card-present transactions with chip technology, may require updates to include controls around biometric authentication in coming years.
Pomelo Launches a Secure tool for International Money Transfers.
Pomelo, a US-based company, has launched a secure international money transfer solution designed to optimize payments from the US to the Philippines. The new tool enhances recipient security, ensuring that funds are sent to the intended individual. Since its inception in 2020, Pomelo has focused on facilitating money transfers to bank accounts or GCash wallets in the Philippines via its app, using Pomelo Mastercard or debit cards. The launch follows increased customer demand for more secure transactions, with features like identity verification through government-issued IDs and bank account confirmation via micro-deposit. This initiative aims to improve the security and efficiency of international transfers.
Crypto Scoop
Bitcoin Soarsto New High of $75,000 Following Trump’s Victory
On November 6th, as Donald Trump gained momentum in key swing states, both the dollar and Bitcoin surged, fueled by traders betting on his victory and expectations of tax cuts, tariffs, and rising inflation.. Bitcoin hit a record high of $75,371.69, surpassing its March peak. Trump has pledged to make the U.S. the global leader in cryptocurrency prompting speculations as to wider adoption and favourable crypto regulations in the United States.
The United Kingdom is set to introduce a draft regulatory framework for cryptocurrency assets in early 2025, as announced at the City & Financial Global Tokenisation Summit in London on 21 November 2024. The timeline was delayed due to a general election earlier this year, which resulted in a change of government. The framework is expected to cover areas such as stablecoins, staking services, and cryptocurrencies, adopting a unified approach to streamline the regulatory process.
Yellow Card secures crypto licence in South Africa
Yellow Card, a pan-African stablecoin infrastructure company that raised $33 million in October, has obtained a Crypto Asset Service Provider (CASP) licence in South Africa, marking a key milestone in its regional growth. In 2024, South Africa eased its regulatory approach to cryptocurrency, with over 138 companies now operating within the country’s regulated crypto ecosystem. The licensing framework, introduced to oversee services like exchanges, payment gateways, wallets, and advisory providers, has supported the processing of $26 billion in crypto transactions between June 2023 and June 2024. This regulation allows the South African government to tax crypto returns and mitigate risks tied to money laundering and terrorist financing.
Sanctions on Tornado Cash Overturnedby US Federal Appeals Court
The Fifth Circuit Court of Appeals recently ruled that the sanctions imposed by the United States Department of the Treasury on Tornado Cash’s decentralized and immutable smart contracts were unlawful. The court determined these contracts do not constitute “property” under the International Emergency Economic Powers Act, as they are autonomous and cannot be controlled or owned. This decision limits the regulatory powers of the Treasury and highlights challenges in applying traditional legal frameworks to blockchain technologies. It also sets a significant precedent for businesses operating in decentralized ecosystems, providing clarity while raising questions about future regulatory approaches.
Kenya’s Blockchain Future: New Virtual Asset Regulations in 2024
Kenya’s proposed Virtual Assets Service Providers (VASPs) Bill 2024 seeks to establish a comprehensive regulatory framework for the cryptocurrency and blockchain industry, emphasizing consumer protection, financial integrity, and market stability. The bill mandates licensing for VASPs, requires adherence to strict anti-money laundering and counter-terrorism financing measures, and places the sector under the oversight of the Capital Markets Authority (CMA). It also introduces taxation provisions, reporting obligations, and consumer safeguards to enhance transparency and secure funds within the virtual asset ecosystem. This initiative reflects Kenya’s ambition to balance innovation in blockchain technology with robust regulatory standards to mitigate risks associated with unregulated virtual asset markets.
Rwanda plans to introduce cryptocurrency regulations by 2025, as stated by the Governor of the National Bank of Rwanda. The regulations aim to ensure that cryptocurrencies are safely integrated into the financial system, focusing on investor protection and preventing financial crimes. Rwanda is not looking to ban cryptocurrencies but wants to regulate them within a clear framework to promote innovation while maintaining financial security. These regulations are expected to be finalized in early 2025.
Nigerian SEC Flags Marino FX Ltd as Unlicensed Crypto Platform
The Nigerian Securities and Exchange Commission (SEC) has issued a strong warning to investors and the general public regarding the status of Marino FX ltd, a Nigerian based cryptocurrency exchange company. The SEC has clarified that the company is neither licensed nor authorized to operate as a cryptocurrency exchange in Nigeria. The implication is that transactions on the company’s platform could expose investors to financial risks, including fraud and loss of investment.
Nigeria’s Investment and Securities Bill:IntegratingVirtual Assets into the Traditional Securities Framework
The Nigerian Investment and Securities Bill seeks to incorporate virtual assets under the definition of securities, marking a significant step toward regulating digital assets within the existing securities framework. This would subject digital assets like cryptocurrencies to the same regulations as traditional securities, including requirements for disclosure, reporting, and investor protection. However, this inclusion raises important questions about how the current regulatory framework, based on the Investment and Securities Act (ISA), will adapt to the unique characteristics of virtual assets, such as decentralization, cross-border transactions, and lack of a central authority. These assets differ fundamentally from traditional securities, and applying the same regulatory rules may pose challenges. Nonetheless, the Bill reflects a growing acknowledgment of the need to integrate digital assets into the broader financial market while maintaining security, stability, and investor protection.
The Wolfsberg Group’s recently published FAQs provide important compliance guidelines for financial institutions dealing with digital assets. The guidance highlights the need to adapt traditional Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures to the unique characteristics of cryptocurrencies, such as decentralization and anonymity. It emphasizes robust customer due diligence, transaction monitoring, and a risk-based approach to mitigate financial crime risks. The group’s stance reflects growing global recognition of the challenges posed by digital assets and the need for stringent, clear standards to balance innovation with security.
Barclays, the British multinational bank, has completed its acquisition of Tesco Personal Finance’s retail banking division. The acquisition encompasses a range of services, including credit cards, unsecured personal loans, deposits, and the associated operational infrastructure, all of which will now be managed under Barclays UK. Both Barclays and Tesco Bank will continue to focus on serving the needs of their customers, adapting to an evolving market, and ensuring compliance with local regulatory requirements.
Access Bank toAcquire Mauritius-Based Afrasia Bank
Access Bank UK, a subsidiary of Access Holdings, will acquire a majority stake in Afrasia Bank, Mauritius’ fourth-largest bank by total assets, with over $5.7 billion in assets as of June 30, 2024. This acquisition allows Access Bank UK to expand its personal and corporate banking services in Mauritius, a key financial hub contributing 13.1% to the country’s GDP. The move also positions Mauritius as a strategic base for trade finance and regional connectivity, boosting Access Bank’s cross-border transaction capabilities. This deal follows Access Bank’s broader African expansion strategy, including recent acquisitions in Kenya, Tanzania, and Nigeria. Access Bank CEO Roosevelt Ogbonna emphasised the potential for fostering economic inclusion and trade in the region.
‘Mail to Pay’, a Dutch RPA startup focused on debt collection, has acquired Belgian fintech POM, a digital payment services provider, to unify operations under the POM brand in Belgium. The acquisition enables POM’s customers to leverage Mail to Pay’s functionality for automated and personalized invoicing. RPA adoption continues to rise in finance and commerce, streamlining repetitive talks, with new machine learning models poised to expand its capabilities further.
Deals and Raises
Faber Launches third VC fund with $34m First Close, Aims for $64m
Stanbic, Cardinalstone, 8 others trade 55% of equities in NGX
Raknida Secures a $100,000 Grant to Support its Expansion into the US Market.
Ariika Raises a $3 million Series A Extension to Drive its Expansion Across the MENA Region.
Join the Conversation
Have questions or insights about the regulatory landscape in your region? Reach out to us on any of our social media handles, email and we would be available to help. Also share your thoughts in the comments below and let’s continue the conversation! Please note that the information provided in this article does not constitute legal or financial advice and should not be construed as such. For legal advice specific to your situation, please consult a legal practitioner.
Welcome to the October regulatory round up. We provide you with the latest regulatory news and insights across Nigeria, Africa and beyond. Let’s dive into a thoughtful and comprehensive update on recent developments.
Regulatory Update in Nigeria
Forex Game-Changer as CBN Launches Electronic Foreign Exchange Matching System.
NDPC Extends Deadline for Registration of DCPMI’s, Tightens Rules on Unregistered Processors.
CBN Strengthens Global regulatory ties: Signs MOU with Host Countries of Nigerian Bank Subsidiaries.
FIRS Moves to Enhance Ease of Doing Business, Launches USSD Code to Simplify Tax Administration.
National Assembly Deliberates Bill to Increase VAT to 10% by 2025.
Court Orders Release of Binance Executive as EFCC Withdraws Money Laundering Charges.
CBN Unveils Plan to Introduce BVN platform for Non-resident Nigerians.
PenCom Directs LPFA’s to Suspend Investment in Commercial Papers involving Non-Bank CMOs.
NCC NIN Sim verification Directives Births Significant Loss for Nigeria Telcos.
Welcoming Innovation While Addressing Challenges
Across Africa
Huawei Unveils Plans to Open Cloud Region in Nigeria by end October.
Kenyan Lawmakers Revive Push to Split Safaricom and M-PESA.
South Africa’s FSCA Withdraws Banxso’s FSP License Amidst Regulatory Scrutiny.
Egypt Telecom Regulator Rolls out New Set of 5G Licenses to Telcos, Gears up for 5G Technology Adoption.
South Africa Moves to Amend 30% Ow.nership Requirements for Global Communication Giants.
South Africa Insists Mandatory Registration and Licensing for Forex Trading Signal Providers.
Kenya Revenue Authority to Launch Whatsapp Chatbot for Tax invoicing by 2025.
Bank of Ghana Opens Applications for New Primary Market Dealers in Government Securities Auctions.
Algeria Cosob Considers Allowing Insurers Function as Stock Market Intermediaries.
Deals and Raises
Yellow Card Closes Series C Funding with a $33 Million Equity Financing.
Open AI Secures $6.6 Billion in Record Breaking Venture Round.
Imprint Secures $75 Million in Series C Funding to Support Advancements in Cloud-based Credit Card and Risk Platforms.
Moniepoint Closes Series C funding with a US$ 110 Million Equity Financing.
Across the World
TD Bank faces $3 Billion in Penalties over AML Compliance Failures.
Stripe Acquires Bridge, Expands into the Stablecoin Sector
News in Nigeria
Forex Game-Changer as CBN Launches Electronic Foreign Exchange Matching System.
The Central Bank of Nigeria has announced the introduction of the Electronic Forex Matching System for forex transactions in the interbank forex market. The CBN’s new Electronic Foreign Exchange Matching System offers companies improved transaction speed, transparency, and market stability, enhancing customer trust and operational efficiency. It also demands tighter compliance with forex reporting and data security standards due to increased regulatory oversight.
NDPC Extends Deadline for Registration of DCPMI’s, Tightens Rules on Unregistered Processors.
The Nigeria Data Protection Commission has extended the deadline for the mandatory registration of data controllers and processors of major importance to October 31, 2024. More importantly, the commission has mandated the disengagement of processors or controllers without registration. This appears like a first enforcement step requiring regulated entities to reassess their vendors for potential exposure.
CBN Strengthens Global regulatory ties: Signs MOU with Host Countries of Nigerian Bank Subsidiaries
The Central Bank of Nigeria (CBN) has signed a memorandum of understanding (MOU) with host countries of Nigerian bank subsidiaries to enhance oversight and strengthen regulatory coordination. The partnership seeks to ensure compliance with local and international banking regulations. Regulatory and compliance risk assessments across group and multinational structures are becoming more expedient with banking regulators expressing a willingness to collaborate to enforce compliance.
FIRS Moves to Enhance Ease of Doing Business, Launches USSD Code to Simplify Tax Administration.
The Federal Inland Revenue Service, on October 9 2024, announced the launch of an unstructured supplementary service data (USSD) code *892#, to enhance tax administration and ease of doing business in the country. The USSD code allows taxpayers to retrieve tax payer identification numbers, verify tax clearance certificates, access information on tax types and rates, locate the nearest FIRS office and get clarification on tax-related enquiries. This comes as part of the agency’s effort towards boosting the country’s ease of doing business.
National Assembly Deliberates Bill to Increase VAT to 10% by 2025
The National Assembly has reportedly received an executive bill proposing an increase in the value added tax (VAT) paid by Nigerians from 7.5% to 10% from 2025 and to 12.5% from 2026 through to 2029. The bill also proposes to increase the VAT rate to 15% from 2030 upwards. In addition, the bill seeks to reduce the corporate income tax rate from 30% to 27.5 from 2025 onwards and a further reduction down to 25% by 2026.
Court Orders Release of Binance Executive as EFCC Withdraws Money Laundering Charges
The Federal High Court, Abuja, has ordered the release of Binance executive after the Economic and Financial Crimes Commission (EFCC) withdrew the money laundering charges brought against him, noting that this decision was based on a need to allow him access to medical treatment abroad, considering his deteriorating health. The detention of Tigran raises questions as to the culpability of lower-level employees for criminal allegations against a company as Nigeria continues to walk a tightrope in its approach to regulating crypto. These events and the outcome of the litigation against Binance may be telling for the future of local crypto regulation especially with precedents that may potentially be laid by the court.
CBN Unveils Plan to Introduce BVN platform for Non-resident Nigerians
One big headache for compliance teams is onboarding of foreigners due to variations in ID, access to BVN registration platform and other blockers. The Central Bank of Nigeria has announced plans to introduce a non-resident Bank Verification Number (BVN) Platform by December to potentially solve or mitigate this compliance issue.
PenComDirects LPFA’s to Suspend Investment in Commercial Papers involving Non-Bank CMOs
The Nigerian Pension Commission (PenCom) has ordered the licensed pension fund administrators (LPFA’s) to suspend investment in commercial papers, where non-bank capital market operators are engaged as issuing and placing agents. This decision was based on the ground that the Securities and Exchange Commission (SEC) is yet to issue any guideline or regulation on the issuance of commercial papers. With the subsequent release of an exposure draft on issuance of commercial papers ,we anticipate the possibility of the ban being lifted soon.
NCC NIN Sim verification Directives Births Significant Loss for Nigeria Telcos
With the final deadline for NIN SIM verification now passed, telecoms have recorded a massive decline in the total number of subscribers as a result of the blockage of all unlinked mobile SIM cards, with Telcos like Globacom recording a loss of close to 70% of its subscribers. Moving forward, while the directive invariably ensures stronger security protocols for the telecom industry, it could cause significant changes in the industry, as telcos continue to struggle to adapt to the new regulatory requirements.
Welcoming Innovation While Addressing Challenges
Across Africa
Huawei UnveilsPlans to Open Cloud Region in Nigeria by end October.
Forex is scarce and expensive. So local cloud service consumers are beginning to switch to local alternatives for cost reduction. While this has seen a rise in local adoption of Africa owned players like Zoho, there is rising international interest in the continent as well. Huawei Technologies may be leading this charge through its recently unveiled plans to open a data center in Nigeria to comply with the country’s data localization requirements. This is coming at a time where African regulators are increasingly considering mandatory localisation requirements particularly for sensitive data.
Kenyan LawmakersRevive Push to Split Safaricom and M-PESA.
Competition law is still very nascent in Africa when compared with developed countries. However, we are seeing recent traction in Kenya with the proposed split of one of its biggest technology companies, Safaricom into two, telco and mobile money companies. This regulator dream may be a reality if the Information and Communications Amendment Bill, eventually passes into law. It may send a signal to other African countries particularly mobile money led ones and some bank led ones like Nigeria where Mobile Money is still gaining traction.
South Africa’s FSCA WithdrawsBanxso’s FSP License Amidst Regulatory Scrutiny
The South African Financial Sector Conduct Authority (FSCA) has announced the provisional withdrawal of Banxso’s Financial Service provider (FSP) license due to concerns about the firm’s operational practices and the potential risks it could pose for clients. The FSCA concerns revolve around the firm’s alleged association with deep fake advertisements and aggressive sales tactics employed by its agents. The provisional nature of the license withdrawal however indicates that the regulator could possibly overturn its decision, if the firm is cleared of the charges.
Egypt Telecom Regulator Rolls outNew Set of 5G Licenses to Telcos, Gears up for 5G Technology Adoption
Egypt’s Minister of Communications and Information Technology, Amr Taalat, has announced the approval of a new set of 5G licenses to major telecom operators in the country, namely, Orange, E& Egypt, and Vodafone Egypt. These three telecom giants join Telecom Egypt which had earlier secured its 5G license in January 2024. This comes at such a significant time as the country gears up for 5G technology adoption, as part of its plans to revolutionize the digital landscape and drive growth in key economic sectors.
South Africa Moves to Amend 30% Ownership Requirements for Global Communication Giants
The South African Minister for the Department of Communications and Digital Technology has indicated plans to amend provisions of the Electronic Communications Act, mandating telecommunications companies to have at least 30% ownership interest to be held by historically disadvantaged groups. The proposed amendments seek to ensure the recognition of equity equivalent programs as an alternative to the requirement to have at least 30% ownership interest held by historically disadvantaged groups. This comes as part of the country’s effort to lower the regulatory hurdles to investment in cheap and reliable broadband.
South Africa Insists Mandatory Registration and Licensing for Forex Trading Signal Providers
The South African Financial Service Conduct Authority (FSCA) has clarified the status of Forex trading signal providers as falling within the regulatory oversight of the FSCA. The regulator mentioned that the practice of providing and publishing online trading signals falls within the definition of financial services under the Financial Advisory and Intermediary Services (FAIS) Act. By implication, Forex trading signal providers are required to possess a financial service provider license before they can validly operate in the country.
Kenya Revenue Authority to Launch Whatsapp Chatbot for Tax invoicing by 2025.
Efforts to boost tax compliance have witnessed an increase from African regulators. The Kenya Revenue Authority (KRA) announced plans to launch a whatsapp chatbot to enhance tax invoicing using the Electronic Tax Invoice Payment systems (e-TIMS). The initiative is intended to boost tax compliance, particularly amongst micro, small and medium sized businesses (MSMEs). The platform, which is expected to launch before or by July 2025, will allow tax-payers to generate tax invoices via the Whatsapp messaging platform.
Bank of Ghana Opens Applications for New Primary Market Dealers in Government Securities Auctions
The Bank of Ghana, in collaboration with the ministry of finance, has announced its call for applications from qualified banking and non-banking financial institutions to apply for selection as primary market dealers for participation in the wholesale auction of government’s securities. Successful applicants will be able to trade securities with the government and also engage in sale of treasury securities purchased from the central bank.
Algeria Cosob ConsidersAllowing Insurers Function as Stock Market Intermediaries.
Algeria’s Securities Market Regulator, Commission for the Organization and Supervision of Stock Market Operations (Cosob), has made proposals to the ministry of finance to introduce provisions within the framework of a preliminary draft law on the financial market, allowing insurance companies the legal capacity to function as stock market intermediaries. If the proposal becomes law, insurance companies will be able to apply for and be issued approval to function as stock market intermediaries, alongside banks and other entities. This could mean a better access to capital for companies and diverse investment options for investors.
Deals and Raises
Yellow Card Closes Series C Funding with a $33 Million Equity Financing.
Open AI Secures $6.6 Billion in Record Breaking Venture Round.
Imprint Secures $75 Million in Series C Funding to Support Advancements in Cloud-based Credit Card and Risk Platforms.
Moniepoint Closes Series C funding with a US$ 110 Million Equity Financing
Across the World
TD Bank faces $3 Billion in Penalties over AML Compliance Failures.
The US Department of Justice has slammed TD bank with a $3 billion fine for its ‘long-term, pervasive and systemic deficiencies’ in its Anti-money laundering compliance operations. This comes after several signals from regulators and the bank’s internal audit reports, highlighting several deficiencies in its transaction monitoring system. The failures allowed the bank to be used as a conduit for illegal activities, facilitating the transfer of over $670 million by 3 different money laundering syndicates, through the bank’s account, between 2019 and 2023.
The United Arab Emirates (UAE) has announced the launch of a regulatory framework for decentralized autonomous organizations (DAOs) operating within the RAK Digital Asset Oasis. The framework, known as the DAO association regime (DARe), provides a legal framework for DAOs to operate, including a legal personality, allowing them the legal capacity to own assets, enter contracts and interact with off-chain entities. The framework provides two models, namely the Startup DAO, catering for DAOs with less than 100 members, and the Alpha DAO, designed for more mature entities, with treasuries exceeding USD 1 Million.
UK FCALaunches AI Lab to Promote Safe and Ethical AI usage in UK Financial Markets
The United Kingdom (UK) Financial Conduct Authority (FCA) has announced the launch of its new Artificial Intelligence (AI) lab, designed to encourage innovative AI solutions in the UK financial markets. The AI lab is expected to serve as a platform for engagement with AI experts and stakeholders, showcase ground-breaking AI innovations and host various AI-focused tech sprints on its Supercharged Sandbox.
Crypto Scoop
Crypto.comFiles Lawsuit Against SEC, Alleges Regulatory Overreach in U.S. Digital Asset Oversight
Crypto.com has instituted an action against the United States Securities and Exchange Commission (SEC) alleging regulatory overreach in its regulation of digital assets. This follows an initial receipt of a Wells notice from the regulator, indicating that some of the tokens traded on its platform qualified as securities. In addition, the company has also filed a separate petition with the Commodity Futures Trading Commission (CFTC) and SEC, requesting a joint interpretation to confirm the status of some specific derivative tokens as falling exclusively within the regulatory purview of the CFTC. The outcome of the suit could significantly affect the overall regulation of the cryptocurrency market in the United States as industry experts have long called for clear and well-tailored regulations for the sector.
UAE toIntroduce Tax-Free Crypto Transactions in November
As part of the United Arab Emirates’ (UAE) drive to become world’s most prominent crypto hub, in an amendment to the Executive Regulation of the Federal Decree Law on VAT, released on 4, October 2024, the country has exempted transactions involving conversion or transfer of virtual assets, including virtual currencies, from the mandatory 5% value-added tax (VAT). The amendment is expected to take effect from November 15, 2024, but to apply retroactively to transactions conducted from January 1, 2018.
Stripe Acquires Bridge, Expands into the Stablecoin Sector
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