The Nigerian crypto market has been one of the fastest growing crypto regions in recent years; however, despite this growth, there seems to be no regulation. The latest report Bloomberg has indicated that a turnaround is finally in sight.
According to the report, the Nigerian Securities and Exchange Commission (SEC) is now seeking to regulate the digital currency market as the adoption of digital assets continues to rise across the country.
Regulation of Digital Assets in Nigeria: A New Era?
Bloomberg highlighted that the country’s regulatory body, based in Abuja, plans to issue licenses to virtual asset providers, including cryptocurrency exchanges, as early as this month. Director General Emomotimi Agama noted:
The SEC wants to provide a platform where people could do these things before and where we could get all the information we needed. (…) We need to empower the young people of this country to reap the benefits that fintech brings.
The move to regulate crypto comes at a time when the West African country is experiencing a surge in crypto-related activity, driven by a young and tech-savvy population eager to take advantage of the opportunities offered by fintech.
The SEC’s initiative is part of a broader effort to bring Nigeria into line with other global jurisdictions that already implemented regulatory frameworks for digital assets.
SEC Director General Agama stressed the importance of supporting the country’s youth in harnessing the benefits of fintech, noting that the size of the market is significant and still growing.
Bloomberg, based on data from Chainalysis, revealed that the growing adoption of digital currencies in Nigeria is quite evident, especially in its magnitude, which up 9% to $56.7 billion in June 2023 alone.
However, Agama believes this figure represents only a fraction of actual market activity as many transactions go unreported.
Nigeria’s Cryptocurrency Backstory
Nigeria has a long history of tackling the cryptocurrency industry, as in other regionsIn 2021, the Central Bank of Nigeria (CBN) issued a statement banning banks in the region from facilitating cryptocurrency-related transactions.
This move by the CBN sparked a series of controversies among crypto users in the country, amid concerns over market manipulation of the naira, the country’s currency.
While they eventually found a way around the issue, the Nigerian government went even further with its measures to crack down on the region’s most widely used digital currency exchange, Binance, in February 2024.
Binance executives prosecuted over allegations that they contributed to the depreciation of the naira by engaging in speculative activities and failing to pay taxes.
Despite these strict measures, the country’s crypto community remains remains resilientwith increasing acceptance and continuity in circumventing the government’s strict measures against their beloved industry.
Main image created with DALL-E, chart from TradingView