FMDQ Explains Why Fintechs Cannot Trade Forex in Nigeria

In Short

FMDQ says fintechs in Nigeria cannot directly trade in the foreign exchange market.

The reason is licensing and exchange control rules.

Fintechs can still access FX through partner banks.

What Happened

FMDQ CEO Zeal Akaraiwe said fintechs are not allowed to directly trade forex in Nigeria because they do not meet the current regulatory and licensing requirements.

He spoke on the sidelines of a Central Bank of Nigeria investor forum in Singapore. Akaraiwe said anyone who wants to trade directly in Nigeria’s foreign exchange market must be authorised as a dealer.

An authorised dealer is typically a bank that has formal permission to buy and sell foreign currency in the official market. Under Nigeria’s exchange control rules, at least one party in every FX transaction must be an authorised dealer. If two unauthorised parties trade FX with each other, regulators treat it as black market activity.

Akaraiwe added that dealer participation also comes with capital rules. The CBN decides how much of a dealer’s capital can be used for FX trading. Dealers must also stay within limits on net open positions, which is a risk measure that tracks how exposed a firm is to currency moves.

He also pointed to compliance steps like statutory documentation and access to regulatory verification portals. These checks are standard for regulated FX market participants.

Why It Matters

This matters for Nigerian fintechs building cross-border payments, multi-currency wallets, and FX-enabled business accounts. Many of these products depend on reliable access to official FX liquidity, not informal market supply.

The message from FMDQ is that fintechs can provide FX services, but mostly as a layer on top of banks. A fintech can still buy or sell foreign currency through a banking partner as long as it follows the rules.

For startups, the practical takeaway is that FX capability in Nigeria is still a partnership and compliance problem, not just a product feature. Fintechs that want more control may need to pursue banking-style licences, or structure around licensed dealers such as banks and other regulated market intermediaries.