FMDQ CEO Explains Forex Trading Restrictions for Fintechs

Zeal Akaraiwe, the Managing Director and Chief Executive Officer of FMDQ Group, addressed the limitations preventing financial technology companies (fintechs) from directly trading in Nigeria's foreign exchange market during an investor forum organized by the Central Bank of Nigeria (CBN) in Singapore. He cited regulatory restrictions, licensing requirements, and the country's exchange control framework as key factors.

Akaraiwe stated that any participant wishing to trade directly must obtain authorization as a dealer, as Nigeria's exchange control rules mandate that at least one counterparty in every forex transaction be an authorized dealer. He noted that fintechs are not regulated by the CBN for forex transactions like they are for payments, complicating their ability to gain direct market access.

However, fintechs can still buy and sell foreign exchange through banking partners, provided they comply with regulations. Akaraiwe emphasized that expanding participation in the forex market would require a comprehensive review of Nigeria's regulatory framework.