Bitrabo Editorial
In recent years, Nigeria has seen significant growth in its crypto market. Despite this growth, the lack of regulation has been a concern. A recent report from Bloomberg suggests that Nigeria’s Securities and Exchange Commission (SEC) is moving towards regulating the digital currency market in response to the increasing adoption of digital assets nationwide.
Nigeria Embracing Digital Asset Regulation
The SEC in Abuja is planning to issue licenses to virtual asset providers, including cryptocurrency exchanges, to regulate the industry. Director-General Emomotimi Agama emphasized the need to support the country’s youth in realizing the benefits of fintech and ensuring compliance with necessary information.
This regulatory move aligns Nigeria with global jurisdictions that have already established frameworks for digital assets, aiming to tap into the growing market activity driven by the tech-savvy population.
The SEC’s initiative is fueled by the significant opportunities offered by the fintech sector and aims to provide a formal platform for cryptocurrency transactions. Data from Chainalysis indicates a notable increase in digital currency adoption in Nigeria, with the volume reaching $56.7 billion in June 2023, a 9% surge from previous months.
Director-General Agama acknowledges that this figure likely underrepresents the actual market activity as many transactions remain unreported.
Nigeria’s Journey with Cryptocurrency
Nigeria has a history of cracking down on the cryptocurrency industry. In 2021, the Central Bank of Nigeria (CBN) issued directives prohibiting banks from facilitating crypto transactions citing concerns about naira market manipulation.
This regulatory stance faced backlash, and despite government crackdowns, the crypto community in Nigeria persevered, finding ways to navigate the challenges posed by regulatory authorities.
In a recent crackdown, the government targeted Binance, a widely used digital currency exchange, alleging that its operations contributed to naira depreciation through speculative activities and tax evasion, leading to legal actions against Binance executives.