According to reports, the government of Nigeria is planning to officially legalize the use of bitcoin and other cryptocurrencies to stay abreast of “global practices.”
As a result of an interview with House of Representatives Committee on Capital Markets Chairman Babangida Ibrahim on December 18, Nigeria’s Punch Newspapers broke the story.
The local Securities and Exchange Commission will be able to “recognize cryptocurrencies and other digital assets as capital for investment” if the Investments and Securities Act 2007 (Amendment) Bill is passed and signed into law, as stated in the article.
Ibrahim emphasized the need for Nigeria to become abreast of the latest happenings in the financial markets. He says they need an effective and robust capital market in Nigeria. To achieve this goal, they should be conversant with contemporary worldwide procedures.
The Central Bank of Nigeria (CBN) ordered Nigerian crypto exchanges and service providers to cease activity and mandated banks to shut down the accounts of any individuals or entities found to be engaging in trading activities in February 2021. This report comes nearly 24 months after the ban was implemented.
But Ibrahim, president of Nigeria from 1985 to 1993, says that the legislation isn’t a complete reversal of the prohibition but rather a secondary assessment of the CBN’s authority.
…we are looking at the legality; what is legitimate and within the context of our business in Nigeria,
the official said.
Most cryptocurrency investors in Nigeria don’t even utilize local accounts, the Central Bank of Nigeria (CBN) found when cryptocurrency trading was first outlawed. Therefore, the CBN does not have authority over them. He claimed that the CBN cannot monitor their activities since they are not using local accounts.
The Investments and Securities Act of 2007 in Nigeria would be revised if this bill were to become law.
Bitcoin and other cryptocurrencies would be given official status under the legislation, and the regulatory functions of the Central Bank of Nigeria and the Securities Exchange Commission (SEC) of Nigeria will be laid down, according to the article.
The regulation appears at the same time as the eNaira, the digital money issued by the Central Bank of Nigeria has failed to gain widespread acceptance among Nigerians. As of October 2022, a full year after its debut, barely 0.5% of the population had adopted the currency.
Adoption in Nigeria continues to rise even after the government banned cryptocurrencies in February 2021, suggesting that previous attempts to clamp down on crypto activity were futile.
According to a survey by CoinGecko in April, Nigerian citizens were also revealed to be the most crypto-curious country. It’s hardly surprising that people in Nigeria are curious about how to combat their country’s persistently high inflation and economic woes.
Additionally, in September, Nigeria began preliminary talks with cryptocurrency exchange Binance about creating a crypto-friendly economic zone to facilitate crypto and blockchain-related enterprises in the country.