Nigeria’s SEC is Considering New Policies for Digital Assets Companies
- The CBN restricted local banks from offering crypto-related services in 2021.
- However, Nigerians have relied heavily on Bitcoin.
- The CBN launched its e-naira in 2021.
Although Nigeria ranks as one of the most crypto-active nations, the industry has yet to enjoy the support of the government and relevant regulators. However, new reports state that Nigeria’s Securities and Exchange Commission is considering new policies for digital asset providers. According to Bloomberg, Nigeria’s SEC is considering enabling authorized digital exchanges to list tokens backed by specific assets.
The Nigerian SEC intends to allow listings of tokens based on assets like debt, equity, or property, according to Abdulkadir Abbas, head of securities and investment. This means that popular cryptocurrencies like Bitcoin and Ether won’t be supported.
The SEC also wants to register fintech companies as digital sub-brokers, intermediaries for crowdsourcing, fund managers, and issuers of tokenized currency. However, the SEC will await clarity from the country’s central bank before registering crypto exchanges.
According to Abbas, license applicants would go through a year of “regulatory incubation,” which would give the SEC time to examine their business practices and provide their services across the nation.
“By the 10th month, we should be able to make a determination whether to register the firm, extend the incubation period, or even ask the firm to stop operation,” Abbas noted.
Local banks in Nigeria have been restricted from offering crypto-related services since 2021. The Central Bank of Nigeria (CBN) justified the restriction by pointing to the significant dangers involved in trading cryptocurrencies like Bitcoin. In addition, the CBN pledged to impose severe sanctions on any financial institution or lender that disobeyed the order.
However, Nigerians have continued to use cryptocurrencies such as Bitcoin for remittances and savings. A Google search in 2022 ranked Nigeria as one of the most crypto-curious nations. Interestingly, despite the ban on cryptocurrencies, the CBN launched its own CBDC, the e-naira, which so far has had low adoption levels.