Liberty Reserve’s replacement! FX brokers wanting to tap into Nigerian markets now have a means of taking deposits

Liberty Reserve used to be a vital method of transferring client deposits to and from Nigeria. Now Travelex has stepped in, which provides a window of opportunity once again in Nigeria for Western retail FX brokerages.

africa

In the last few years of the previous decade and the early part of this decade, Nigeria had been on the radar for many retail FX brokerages as a developing economy which is home to many eager FX traders and potentially large scale introducing brokers.

Some firms began holding seminars across the African country, inviting potential clients to discuss FX trading in groups, and providing educational materials to a demographic of young Nigerians interested in trading global markets.

As a result of this, a network of introducing brokers emerged across the country, and Western brokerages began to amass client bases which contained some degree of retail traders from Nigeria, most of whom were only able to make their deposits and withdrawals via Liberty Reserve, which was a Costa Rica-based centralized digital currency service which was shut down by United States federal prosecutors under the Patriot Act in May 2013 after an investigation by authorities across 17 countries.

The United States charged founder Arthur Budovsky and six others with money laundering and operating an unlicensed financial transaction company. Liberty Reserve is alleged to have been used to launder more than $6 billion in criminal proceeds during its history.

The dissolution of Liberty Reserve signaled the end of any interaction with Nigerian clients, as there was no other method of transferring client funds to and from FX brokers outside Nigeria, especially bearing in mind that merchant services providers Visa and Mastercard are very averse to processing any transactions between FX brokeages and Nigerian retail clients.

Today, a new method of payment has emerged, in the form of a new arrangement between the Central Bank of Nigeria and British deliverable FX company Travelex which has taken the place of the 3,000 Bureaux De Change operators in Nigeria, and can also facilitate global transactions of money to and from Nigeria.

One of the main aspects that will perhaps be a catalyst in opening up the transfer of funds capabilities in Nigeria is that as a result of this partnership, Travelex will start disbursing $15,000 to each of the 3,000 registered Bureaux De Change (BDC) operators across Nigeria as of today.

Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), who disclosed this yesterday, stated that with each of the 3,000 BDCs getting $15,000 each, a total of $45 million will flow into the system.

He lauded the Central Bank of Nigeria for authorising Travelex to take responsibility of disbursing huge dollar inflows from the diaspora estimated at $21 billion annually to BDCs.

Acessibility to global markets by Nigerian investors and traders has been severely limited of late, as a result of sanctions by governments and also by the risk-averse nature of merchant services providers.

Mr. Gwadabe believes that the experience and integrity of Travelex would be key in getting the dollars down to Bureaux de Change, which are offices that many Nigerians rely on for transferring funds abroad, including to investment firms or brokerages.

Additionally, Mr. Gwadabe said the Travelex biometric data capturing would enable the Bureaux de Change to access the International Money Transfer Operators (IMTOs)/Travelex dollars window, resolving some of the compliance related difficulties often experienced when receiving remittances from Nigeria.

Travelex being a large national firm that does not operate under the radar in the way that Liberty Reserve did has the ability to generate a stable environment for transferring funds to brokerages, as well as from brokerages to client accounts, which has to be a good thing indeed.

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<