- The 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 Central Bank of Nigeria (CBN) has tightened regulations on Bureau de Change (BDC) operators and outlawed street trading in foreign currency. According to a Bloomberg report, this measure aims to stabilize the Naira and curb speculative activities.
Simultaneously, the CBN has significantly increased the capital requirements for BDC traders, emphasizing the necessity to regulate and safeguard the value of the Naira.
Speaking on the development, CBN’s Director for Risk Management, Blaise Ijebor, reiterated the prohibition of street trading in foreign currencies. On Thursday, Ijebor stated:
“Street trading of foreign currencies is not allowed. “We don’t want BDCs under the trees. They should be in offices, you walk into their office, change your currency, and walk away.”
The CBN has increased the capital qualification for tier-one BDC operators to 2 billion Naira ($1.4 million). Additionally, the mandatory requirement for tier-two operators has been raised from 35 million Naira to 500 million Naira. BDC operators must comply with this new guideline within six months.
In response to this new regulation, the BDC Operators Union has requested that authorities reconsider the revised requirements and extend the compliance timeline.
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.
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.
Meanwhile, the Naira slipped 1.6% against the dollar on Thursday, changing hands at 1,486 based on Financial Markets Dealers Quotations (FMDQ) data. Street rates on Friday were reported at 1,515 naira per dollar, according to Abubakar Muhammed, CEO of Forward Marketing Bureau de Change Ltd.
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