Preparing new industry regulations for digital asset platforms, Nigeria doesn’t plan to include cryptocurrencies
According to Bloomberg, the Nigerian Securities and Exchange Commission (SEC) is considering allowing licensed digital exchanges to list tokens backed by certain assets. However, the regulator clarified it didn’t concern cryptocurrencies.
Despite the previous reports that the government of Nigeria is preparing to pass a bill to “recognize cryptocurrency and other digital funds as capital for investment,” the national SEC now addresses tokenized coin offerings backed by various traditional assets including equity, debt, and property but not crypto.
The given assets may be soon traded on licensed digital exchanges. The regulator will reportedly register fintech firms as digital sub-brokers, crowdfunding intermediaries, fund managers and tokenized coins issuers. However, it will not register crypto exchanges until the central bank provides clear regulations for the crypto market.
At the same time, the registration process won’t be simple and quick. The Nigerian SEC’s head of securities and investment Abdulkadir Abbas notes that license applicants would undergo a year of “regulatory incubation.” During this time, the SEC will study the applicant’s operations and services in the country. By the tenth month, the regulator might be ready to grant a license. Nevertheless, if needed, the SEC will extend the incubation period or “even ask the firm to stop operation.”
The crypto segment in the country is full of controversies. On one hand, Nigeria ranks as one of the most active countries in terms of adoption and curiosity about Bitcoin and other cryptocurrencies. On the other hand, catering financial services to crypto-related businesses has been prohibited by the local Central Bank since 2021.
At the same time, the Central Bank of Nigeria has been actively promoting its CBDC token known as e-naira. Although it didn’t have high adoption level initially, the CBDC grew more popular as Nigerian ATMs ran dry.