Nigeria to Legalize Cryptocurrencies
2022.12.19 01:00
Nigeria to Legalize Cryptocurrencies
Budrigannews.com – According to reports, a law recognizing the use of Bitcoin (BTC) and other cryptocurrencies as a means of keeping up with “global practices” will soon be passed by the Nigerian government.
Following an interview with House of Representatives Committee on Capital Markets chairman Babangida Ibrahim, Nigerian-based masthead Punch Newspapers reported the news on December 18.
According to the report, the local Securities and Exchange Commission would be able to “recognize cryptocurrency and other digital funds as capital for investment” if the Investments and Securities Act, 2007 (Amendment) Bill is enacted into law.
Nigeria must keep up with capital market trends and developments, according to Ibrahim.
“Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices.”
The Central Bank of Nigeria (CBN) ordered Nigerian crypto exchanges and service providers to cease activity and mandated banks to close the accounts of any individuals or entities found to be engaging in trading activities in February 2021. The report comes nearly 24 months after Nigeria banned cryptocurrency activity.
However, Ibrahim, who also held the position of president of Nigeria from 1985 to 1993, maintains that the law’s passage is merely a secondary review of what falls within the CBN’s authority:
“It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria.”
The Central Bank of Nigeria (CBN) discovered that the majority of these investors don’t even use local accounts when cryptocurrency was initially banned in Nigeria. As a result, the CBN does not have any authority over them. The CBN cannot check them because they are not using local accounts, he explained.
The Investments and Securities Act of 2007 in Nigeria will be modified if the legislation is approved.
According to the report, the law will outline the regulatory responsibilities of the Central Bank of Nigeria and Nigeria’s Securities Exchange Commission (SEC) in relation to digital currencies in addition to granting Bitcoin and other cryptocurrencies legal recognition.
The law also comes at a time when Nigerians have shown little to no interest in the eNaira, the central bank of Nigeria’s digital currency (CBDC), which only received a 0.5% adoption rate a year after it was introduced in October 2022.
As adoption continued to rise following the ban in February 2021, it is conceivable that the Nigerian government’s earlier efforts to crack down on cryptocurrency activity were also ineffective.
Nigerians only trailed the United States in Bitcoin trading volume from January to August 2021, and Nigerians Googled “Bitcoin” more than any other country during that time.
According to a CoinGecko study conducted in April 2022, Nigerians are also the most crypto-curious people. As Nigerians continue to attempt to combat rampant inflation and economic malaise, the curiosity is not surprising.
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Additionally, in September 2022, Nigeria began early-stage discussions with cryptocurrency exchange Binance to create a crypto-friendly economic zone with the intention of supporting businesses in the region that are related to crypto and blockchain.
