Nigeria’s financial security regulator might be planning to relax the age-old ban on cryptocurrencies and digital securities in the country, according to Abdulkadir Abbas, head of securities and investment services at Nigeria’s SEC.
While speaking to Bloomberg recently, he revealed the agency is mulling allowing tokenized digital assets backed by equity, property, or debt while hinting that the cryptocurrency ban is here to stay. Abbas also unveiled plans to vet digital exchanges individually before allowing them to operate legally in the country.
However, the SEC boss acknowledged that a lack of support from the CBN may stifle the commission’s plans to loosen the restrictions, as the apex bank has the final say in allowing financial institutions to work with cryptocurrency within the country.
Nigeria’s infamous crypto ban
Recall that the Central Bank of Nigeria (CBN) released a statement ordering banks to close accounts of any individual or corporate body transacting in cryptocurrencies or related digital assets. It also threatened to sanction banks that refuse to play along heavily. Soon after, the CBN released the eNaira, Nigeria’s official CBDC that didn’t take off.
Despite the CBN ban, Nigeria remains the second largest user of digital currencies like Bitcoin, and usage numbers continue to rise. Needless to say, most Nigerians don’t support the apex bank’s moves on cryptocurrencies, and they’ve demonstrated that severally.
However, the recent Nigerian elections are expected to usher in a new government likely to dissolve the incumbent CBN leadership. A new crypto-friendly central bank governor will likely play along with the SEC, supporting a relaxation of the ban by the incumbent administration.
The SEC forging ahead with its plans could inspire a ripple effect on the country’s financial landscape, encouraging more Nigerians to consider investing in cryptocurrencies. Companies that pulled out due to the ban may also consider returning, as the country’s large market for cryptocurrencies and related products remains very active.