The latest crypto regulation in Nigeria is one of optimism (which signals possible full crypto acceptance) in the country. The Nigerian Security Exchange Commission (SEC) released new rules and regulations safeguarding the issuance, exchange and custody of digital assets in the country.
The new regulation came into existence 20 months after the Nigerian SEC initially issued a press release describing cryptocurrency as “Securities.” However the new regulation now classifies and recognizes cryptocurrency and other business related to it as digital assets.
Before the new regulation on digital assets (cryptocurrency), the Nigerian government was a bit hostile towards crypto and its adoption, which reflects in its previous regulations. The Central Bank of Nigeria (CBN) published a press release on February 5, 2021, restricting all banks and financial institutions within the country from processing crypto transactions.
Despite the hash regulations on crypto in the past, Nigeria is still one of the countries with the highest crypto users worldwide, currently ranking sixth in world crypto adoption.
The new regulation from the Nigeria SEC now solidified the country’s interest and position in adopting crypto and other digital assets. Although the new regulation still contrasts with the country’s Central Bank crypto stance, the new development might help the Central Bank review its stance on digital assets.
SEC’s new development has opened the country to crypto and other related businesses. The released document by the Nigerian SEC mandates any crypto investors or companies seeking to establish within Nigeria or target Nigerians to obtain necessary papers and permit to operate within its territory.
The new SEC regulation
The published document covers four crucial aspects of digital assets and how they can function within the country’s territory:
- Operating a digital asset exchange in Nigeria
- Token issuance in Nigeria
- Operating digital assets offering platforms within the country’s territory
- Requirement for digital assets custodians
Apart from other mandatory licenses for companies offering crypto services or products to Nigerians, companies offering crypto services must acquire a VASP (Virtual asset service provider) license.
The VASP license comes with its rules and regulations. For instance, a crypto company offering crypto products and services needs to obtain a risk-acknowledgement form from its users and a disclaimer that the company does not cover state losses from investment. These are some rules and regulations entrenched in the newly published SEC statement.
Nigeria’s latest developments and favorable crypto regulation might help crypto startups troop into the country for investment opportunities. In turn, crypto adoption might also help boost the country’s economy by providing job opportunities for Nigerians and speeding up tech growth.
Nigeria takes the lead as the most populated country in Africa, with over 200million people. The country has the biggest economy in the whole of Africa. The country’s economic strength and population will no doubt make the country a hotspot for crypto investors. With more friendly crypto regulations in the country, It’s a matter of time before the country becomes a strong pillar of crypto adoption in Africa.
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