Analyst Urges Nigerian Authority to Develop Friendly Crypto Licensing Regulation
The growing popularity of digital assets in West Africa obliged the policymakers to address the regulatory gaps in the crypto industry. In a blog post, the famous crypto analyst Rume Ophi urged the Nigerian Securities and Exchange Commission (SEC) to revise the existing licensing regulation for crypto assets.
The analyst highlighted Nigeria’s complex licensing regime for virtual asset services providers (VASP). Rume regretted that the lack of clear licensing requirements scared away potential investors.
Rise of Crypto Adoption in Nigeria
Even though crypto is not a legal tender in Nigeria, the country has been making significant milestones in becoming the leading crypto hub in Sub-Saharan Africa. Speaking exclusively at a local news outlet, the analyst described the existing crypto licensing regulation as unfavourable.
The official noted that licensing requirements defined by the Nigerian SEC only favour offshore crypto exchanges. He complained that when formulating the crypto licensing regulation, the policymakers failed to consider the need for local exchanges.
A review of the existing licensing requirements demonstrated that VASP seeking a crypto license was required to meet the application processing requirements. These requirements include the registration fees and other applicable charges.
Ophi argued that most early startups’ failed to afford current registration fees. The analyst noted that during the registration process, the applicant must pay around 500 million naira, equating to $556,620 to obtain a VASP license.
The analyst argued that foreign exchanges would dominate the Nigerian crypto market if the SEC failed to revise the existing crypto licensing requirement. Ophi compared the number of local and foreign crypto exchanges in Nigeria and noted that they lacked a healthy balance.
Regulatory Gaps in the Crypto Industry
In support of Ophi’s argument, a prominent Web3 legal practitioner, Kue Barinor Paul, told the X community about the need for the SEC to amend the existing crypto regulations. The lawyers urged the SEC licensing requirements to be merged with the VASPs guidelines.
The official called for affordable and comprehensive licensing requirements in the West African country. Paul noted that the existing crypto licensing requirements were friendly to foreign investment.
He encouraged the SEC to review the current licensing registration thoroughly to create a healthy balance for local and foreign exchanges. Last year, the SEC formulated a 54-page report outlining digital asset providers’ regulatory requirements. The report identified how Nigerian financial institutions and banks interacted with digital assets in running day-to-day activities.
Nigerians’ Demand for Favorable Crypto Licensing Requirements
Besides highlighting the regulatory gaps in crypto licensing, Ophi urged the Nigerian National Assembly to collaborate with the SEC to create friendly enviroment for digital assets.The executive encourages Nigerian policymakers to develop policies that match current economic needs.
In a recent survey, Nigeria was ranked among the largest economies in Africa. The survey targeted 15 African countries with the growing adoption of crypto assets. The report demonstrated that Nigeria has the highest adoption of crypto assets.
In a subsequent “2023 Cryptocurrency Geography Report” study, the Chainalysis team ranked Nigeria among the top five countries with the highest crypto adoption. The rise of the crypto-savvy population in Nigeria has forced regulators to step up and create friendly regulations for digital assets.
A few weeks ago, the Nigerian authority lifted the ban on the involvement of financial instutions in crypto transactions.
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