In 2021, the Nigerian financial institutes have turned into a trigger for authorities’ crackdown over crypto, which started in February with a notorious ban put by the central bank on the lenders offering services to the exchanges of cryptocurrencies in the country. As the majority of Nigeria’s crypto space is peer-to-peer or underground, the securities regulator of the country called SEC (Securities-and-Exchange-Commission) is currently pursuing ways for providing more security to the investors by introducing more regulations due to which the investors and the industry could be better regularized and protected.
As per the report of 2nd September, a dedicated fintech section has been constructed and deployed to study blockchain and crypto investments in addition to the knowledge about the products thereof. This is so to gather prefatory material regarding the development of a framework for crypto regulation in the future. Lamido Yuguda, the Director-General, stated to Reuters that the department is closely observing the market to figure out an adequate plan for supporting the investors and protecting their blockchain investment by providing adequate regulations.
The securities commission of the country believes that entire of the crypto assets are characterized as securities till they are verified to be otherwise. It added that the commission would be able to create a framework of regulations in one condition, and that requires the cryptocurrencies to be reincorporated into the banking system of the country. It is also reported that the department is stepping towards functioning with the fintech firms to build up a better domestic market regarding the securities to discourage capital flight that is constantly plaguing many sectors.
The exclusion of crypto from channels of the banking system has not diminished the passion for this segment. Rather, during this economically and politically troublesome year, a continuous increase has been witnessed in the adoption of cryptocurrency. Nigeria’s central bank (CBN) is collaborating with a fintech which is based in Barbados, as a procedural guide and partner to assist in the construction of the country’s digital currency named e-naira. The preliminary guidelines about this project were issued in August.
Recently, a meeting was conducted by the country’s committee for monetary policy in Abuja. During the meeting, Godwin Emefiele (the governor of CBN) confidently assured that cryptocurrencies such as BTC (Bitcoin) will ultimately be a part of the legal, financial assets of the country; however the government would try its utmost to restrict its utilization in illegal financial activities.