Nigeria SEC drafts new rules for digital assets
Nigeria, one of the world’s most curious nations about cryptocurrencies like Bitcoin (BTC), is preparing new industry regulations for digital asset platforms.
The Securities and Exchange Commission (SEC) of Nigeria is considering allowing licensed digital exchanges to list tokens backed by certain assets, Bloomberg reported on May 1.
According to SEC Head of Securities and Investments Abdulkadir Abbas, the authority plans to only approve listings of tokens based on assets such as equity, debt or real estate. Cryptocurrencies such as Bitcoin (BTC) or Ether (ETH) will not be among these assets, Abbas reportedly said.
Nigeria’s SEC aims to register fintech firms such as digital sub-brokers, crowdfunding intermediaries, fund managers and tokenized coin issuers. The authority will not register crypto exchanges until the central bank provides clear rules for the crypto market.
Abbas noted that license applicants will undergo a year of “regulatory incubation” that allows the SEC to study their business and hire their services in the country. He added:
“By the 10th month, we should be able to make a decision whether to register the firm, extend the incubation period or even ask the firm to cease operations.”
As previously reported, the Central Bank of Nigeria banned local banks from providing services to cryptocurrency-related platforms in early 2021. For the ban, the regulator cited high risks associated with trading cryptocurrencies such as Bitcoin. The central bank also promised to implement severe penalties to any lender or financial institution that does not comply with the directive.
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Despite the ban, Nigeria has emerged as one of the most active countries in terms of adoption and curiosity about Bitcoin and other cryptocurrencies.
According to data from Google Trends, Nigeria ranks No. 2 in search interest for the keyword “Bitcoin,” second only to El Salvador, which adopted Bitcoin as legal tender in 2021. Other jurisdictions on the list of the top five crypto-curious countries include Slovenia, The Netherlands and Switzerland.
According to Chainalysis’ crypto adoption index, Nigeria was also among the top 20 countries in terms of crypto adoption in 2022.
While banning cryptocurrencies, the Central Bank of Nigeria has been actively promoting its digital central bank currency known as eNaira. After a slow start, eNaira reportedly saw increased adoption due to national fiat reserves facing severe shortages.
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