Nigeria mulls regulatory framework for Cryptocurrency adoption

The Federal Government, through the Central Bank of Nigeria (CBN) said it will bring up a regulatory policy framework for the implementation of cryptocurrencies in the country.

It disclosed this in a report on ‘Nigeria payments system vision 2025.’

According to Investopedia, Stablecoins are cryptocurrencies whose value is pegged or tied to that of another currency, commodity, or financial instrument, providing an alternative to the high volatility of the most popular cryptocurrencies, including Bitcoin, which has made crypto investments less suitable for common transactions.

Recall that CBN had banned cryptocurrency-related transactions in the country while claiming that digital currency was used for money laundering and terrorism.

The statement by the Acting Director, Corporate Communications, CBN, Osita Nwanisobi, said the ban on such transactions will not have any negative impact on fintechs.

This was corroborated by Babangida Ibrahim, Chairman of the House of Representatives Committee on Capital Market and Institutions of Nigeria, who claimed the country would soon pass a law making the usage of Bitcoin and cryptocurrencies legal.

The bill, he said, will amend the 2007 Investments and Securities Act and will recognise Bitcoin as legal capital for investment.

Back in February of 2021, Nigeria effectively banned the usage of Bitcoin with a letter prohibiting regulated financial businesses from “dealing” with cryptocurrencies.

In the same year, several reports had listed Nigeria as having the largest volume of Bitcoin peer-to-peer trading in the world.

Ibrahim was quoted to have said that Nigeria is behind in regards to regulation of the industry, adding that “we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date with global practices.”

If the proposed regulation properly addresses the growing Bitcoin usage within the country, it could be a major catalyst for the African continent’s most populated country, some analysts believe.

Bitcoin has had a large presence in the country despite the current ban, including the construction of a Bitcoin village, Nigerian Bitcoiners participating in all sorts of development, philanthropic work from Bitcoin companies and mining, being an active industry there.

The banking regulator had earlier banned crypto-related transactions in the banking system.

“The CBN would consider the development of a regulatory framework for potential implementation of ‘Stablecoins,” CBN disclosed.

The bank added that “It would also continue its watching brief on Initial Coin Offerings as well as work with Security Exchange Commission to jointly develop a regulatory framework in the event of adoption of an ICO-based investment solution.”

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