Nigeria’s Securities and Exchange Commission has revealed that it would likely regulate the crypto market following the controversial crypto ban, which broke out some months ago. Central Bank of Nigeria clarified that it did not ban cryptocurrencies but only forbade financial institutions from facilitating the payment structure. Similarly, Nigeria is moving into regulating the sector, which has gotten the attention of people worldwide.
Nigeria’s huge crypto market has contributed to Africa’s crypto exposure, and holders fear that regulation could significantly prevent the easy access holders have to digital assets. The country’s SEC explained that the sudden ban had disrupted the crypto market in Nigeria and that the regulation would ensure the assets are not used for illicit purposes.
SEC explains why it suspended regulatory plans
One of the nation’s well-known regulators, Lamido Yuguda, who is the director-general at the Securities and Exchange Commission, explained that the ban significantly affected the digital asset market within the country. Yuguda revealed this information during a press conference, which took place after a meeting with the nation’s Capital Market Committee.
The ban, which started around February, prevented holders from using financial institutions to streamline the process. Before the prohibition, well-known crypto firms, such as Binance and Luno, dominated the market, and they settled payments through the region’s local banks.
The director-general revealed that the regulatory body had to stop plans of regulating the industry due to the sudden disruption. The body had announced plans to regulate the industry since 2020 but paused the plans when news of the ban broke out. Interestingly, the commission clarified that the regulatory plan’s suspension would continue until Nigeria allows users to use bank accounts for their transactions.
The leader spoke more about the regulations by mentioning that SEC and the CBN would partner to assure proper market regulations. Many countries have been releasing plans to regulate the sector, following the controversial news associated with crypto use.
Luno explains how Nigerians are buying crypto at a premium
Bad players have made governments see digital assets in a bad light, as many believe that cryptos are mainly used for terrorism or money laundering. Despite the digital asset ban, the regulator explained that it wants fintech to grow.
The crypto ban has discouraged some users as many are forced to use peer-to-peer to buy or sell their digital assets. Users are buying and selling the assets at a premium due to the weak exchange rate and other factors.
It’s safe to note that the country’s CBN governor had explained that Nigeria was not against virtual assets but prevented institutions from facilitating their activities. This has made exchange see some notable declines from Nigeria as locals try to understand how peer-to-peer works and to adapt to the new system.
Luno, a prominent exchange within the region, revealed that the ban would make people go underground. According to the exchange, underground transactions allow users to get scammed easily as they buy and sell the digital asset at a premium due to the ban.