By Shelly Melancon (Switzerland)
Cryptocurrency is spreading rapidly on a global scale regardless of the numerous restrictions and regulations present in various crypto markets of different countries. Crypto investors in the African giant, Nigeria are facing a hard time with crypto transactions. This is because government restrictions have caused investors to go underground or result in peer-to-peer crypto transactions. However, things are about to change as the country’s SEC is devising strategies to make crypto trading safe and secure for investors within the country. Such development is a welcoming one as it would mean that crypto trading would no longer have a hard time trading in the country
Earlier this year, cryptocurrency activities in the country received a big blow with the country’s central bank placing a ban on institutions providing services to crypto exchanges. This led to Nigeria’s crypto market adopting the peer-to-peer transaction strategy which it has been running on ever since. The outlook of the market is however about to change as Nigeria’s SEC is working on the introduction of regulations and policies that would provide a regularized crypto industry and offer maximum security to investors. The commission also aims at providing an investor-friendly environment for the crypto economy in the country. It has already taken the first step to achieve this by creating a financial technology unit assigned with the study of cryptocurrency and its operations.
Also read:This fintech division will be responsible for gathering information on crypto, blockchain technology, crypto investments, exchange protocols, and crypto products. The acquired knowledge would then be channeled to create a crypto regulatory framework that would be beneficial to both users, crypto firms, and the government. By doing so, regulations that would be set in place would not dissuade crypto trading in the country but rather support it while guaranteeing users’ security. According to Nigeria’s SEC, crypto assets are considered securities and the regulatory scheme would help in integrating crypto back into the country’s banking system. The fintech division would also work with the agency to strengthen the domestic securities market across the various sectors of the country’s economy.
Nigeria’s crypto market amid regulations
Even with the policies and financial legislations by the country’s central bank, the adoption of crypto within the country has continued to progress. While crypto users in the country cannot trade with their digital assets through banking channels, their enthusiasm for the exchange of crypto has not reduced. This has led to the peer network of exchange receiving massive adoption and use even with the pandemic and other economic challenges of the country. Just recently, the Central Bank of Nigeria announced a partnership with a fintech firm from Barbados. This partnership was solely for the country’s proposed digital currency project and its introductory guidelines.
According to the governor of CBN, the use of cryptocurrencies would soon be legalized and publicly sponsored by financial houses existing in the country. He is also confident in the government’s readiness to protect investors and prevent the use of crypto for illegal actions.
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