Nigerian authorities are taking cautious steps to regulate Africa’s largest cryptocurrency market, urgently seeking legal clarity amidst widespread fraud. The SEC has recently approved two exchanges, signaling a positive shift, while the government faces challenges from ongoing scams and past regulatory rigidities. Broad legislative measures are being discussed to ensure a structured environment for digital assets, and experts stress the need for focused regulatory policies.
The Nigerian government is cautiously moving to regulate its burgeoning cryptocurrency market, which is the largest in Africa. This initiative aims to provide legal clarity in a space that has been plagued by fraud and market volatility. Despite historical skepticism towards digital currencies, Nigeria was ranked second globally in crypto adoption by Chainalysis for 2023 and 2024.
Recently, the country’s Securities and Exchange Commission (SEC) has begun taking steps to formalize the regulation of digital assets. In August, SEC Director-General Emomotimi Agama confirmed progress, stating the creation of clarity around digital asset use is a priority. Two exchanges, Busha Digital Limited and Quidax Technologies Limited, received “Approval-in-Principle” from the SEC to start operations.
Buchi Okoro, Quidax’s CEO, expressed optimism, stating that regulatory moves would foster market trust and stability. However, this push faces challenges from ongoing fraud and investment scams; in December, Nigeria’s Economic and Financial Crimes Commission arrested 792 suspects in a significant operation targeting cryptocurrency-related fraud.
Beyond exchange approvals, the Nigerian parliament is discussing a new investment and securities bill aimed at establishing a regulatory framework for digital currencies. Following the 2023 elections, President Bola Tinubu signaled a supportive regulatory environment for cryptocurrencies, further distancing from the previous administration’s restrictions.
However, recent restrictions on crypto exchanges, including specific actions against Binance, have raised concerns. The central bank governor criticized Binance, which subsequently ceased naira transactions amid customer panic about access to funds. The Inland Revenue Service is also pursuing a lawsuit against Binance for operating without proper registration.
While the overall regulatory landscape appears to be improving, concerns about money laundering and the volatility of cryptocurrencies persist. Laolu Biyi Samuel from Busha Digital notes a positive shift in government attitudes towards innovation, but industry leaders stress the need for immediate clarity on regulations and potential national strategies towards Bitcoin.
Nigerian authorities are slowly but steadily moving towards regulating the country’s vibrant cryptocurrency market. The SEC’s recent approvals of crypto exchanges, along with ongoing legislative efforts, reflect a burgeoning recognition of the need for a structured regulatory environment. However, substantial challenges remain, including rampant fraud and market volatility, necessitating continued vigilance and proactive governance.
Original Source: www.voiceofalexandria.com
