Nigerian Government’s Greenlights Policy to Promote Blockchain-Based Economy – Details

Federal Executive Council of Nigeria approved a national blockchain policy in a meeting on 3 May 2023.

This policy will enable the country to develop a proper regulatory framework for blockchain adoption.

Nigeria is one of the nations whose citizens have one keen interest in cryptocurrencies.

However, crypto transactions involving traditional banks are considered illegal in the region due to a controversial ban.

Federal Executive Council Approves Blockchain Policy Adoption

The Nigerian Federal Executive Council (FEC) confirmed to adopt a national blockchain policy. This approval is in response to a memo from the Nigerian Minister of Communications and Digital Economy, Isa Ali Ibrahim.

In an official announcement, the Federal Ministry of Communications and Digital Economy (FMCDE) referred to a report by PriceWaterhouseCoopers.

The 2020 report states that adopting blockchain technology across various sectors and industries could potentially contribute $1.76 trillion to global gross domestic product by 2030.

This long-term estimate represents 1.4% of world GDP.

FMCDE developed this policy in partnership with the Federal Government of Nigeria, in line with the seventh pillar of the Digital Economy Policy and Strategy.

The policy aims to create a framework for conducting secure blockchain-based transactions and data sharing between individuals, businesses and authorities.

In particular, FMCDE has instructed regulatory bodies to handle regulatory creation and implementation in various sectors.

These bodies include the Central Bank of Nigeria, the National Universities Commission and the Nigerian Communications Commission.

FMCDE also aims to use different strategies to encourage blockchain adoption, such as promoting digital identity and encouraging digital literacy.

It also plans to establish a national sandbox for testing, piloting and hosting blockchain business and incentive programs.

Nigeria ready to create regulatory framework for Stablecoins

Nigeria is one of the nations with massive interest in cryptocurrencies. It is in second place Google Trends on most searches for Bitcoin in the last twelve months.

Nigeria is one of the early pioneers of CBDC in Africa, rolling out e-Naira.

At the moment, the Central Bank of Nigeria stated in a report in January 2023 its readiness to accept private stablecoins.

However, a legal framework for the regulation of such projects is a priority for the Norwegian Financial Supervisory Authority.

The report, marked with ‘Nigeria Payments System Vision 2025‘, also describes regulations for initial coin offerings (ICOs).

It states that this area’s current lack of regulation translates into investor losses. The CBN sees ICO adoption as a fundraising avenue for capital projects, crowdfunding and peer-to-peer lending.

In particular, the Central Bank of Nigeria’s eNaira struggled to gain relevance, with less than 0.5% of the population use the digital resource from and including 25 October 2022.

However, the recent implementation of the blockchain policy may finally improve the performance of digital assets and the Nigerian CBDC.