In February 2021, the Nigerian government through the Central Bank of Nigeria placed a complete ban on the transaction of cryptocurrency, ordering banks to restrict any financial institution that engaged in such activities. While the ban was in place, the cryptocurrency market didn’t stop: participants simply found ways to circumnavigate the rules and carry on. In an indication that the government was ready to take crypto as seriously as a wide section of the country’s tech-savvy populace does, the Securities and Exchange Commission has released a set of rules and guidelines for the issuance, exchange and custody of digital assets in Nigeria. The 54-page paper outlines the requirements for issuers and custody holders, as well as classifies digital assets such as cryptocurrency – as security subjects. Under the new rules, no exchange of those assets can go on without the SEC’s “no objection” approval. However, this new regulation notwithstanding, the Central Bank still prohibits cryptocurrency transactions. On Business Edge for Monday, the focus is on the new crypto assets rules in Nigeria. Tolulope Adeleru-Balogun is joined by Ola Atose, founder of Koin Koin Exchange who speaks from London, England.
On the one hand, Ola Atose is encouraged that there are guidelines which mean that the crypto market is being taken seriously by the Nigerian government. On the other hand, it is unclear that while the Security and Exchange Commission is willing to create an appropriate playing field, the CBN still frowns at it. “I feel, personally, that it’s a step in the right direction. But we need the support of the Central Bank and the Finance Ministry,” he says.
There is also the question of the appropriate regulatory body for cryptocurrency in Nigeria, the SEC or the CBN? The question exists because both bodies look at crypto differently. “I think the SEC views exchanges and anything considered as an asset falls under its purview. The CBN is involved because people view digital assets as a form of currency. Therefore it’s important to hear from the Central Bank,” Atose says.
Watch the full conversation on Business Edge above.