By: Damian Okonkwo
The Central Bank of Nigeria (CBN) has announced plans to develop a regulatory framework for the use of cryptocurrencies in the country. This was revealed in the report on 'Nigerian payments system vision 2025'.
Here, the regulatory body said they will be working closely with the Security and Exchange Commission (SEC) to develop a regulatory framework for the adoption of coins that follows the ICO standards and other stablecoins.
In a statement, CBN Governor Godwin Emefiele said that while the bank recognizes the potential benefits of cryptocurrencies, it is also aware of the risks and vulnerabilities associated with their use.
Hence, he averred that “the CBN is therefore committed to working with all relevant stakeholders to ensure that the development and use of cryptocurrencies in Nigeria are effectively regulated and supervised to protect consumers and prevent money laundering and financing of terrorism,”.
According to Emefiele, the regulatory framework will also help to foster innovation and support the growth of the fintech sector in Nigeria.
The announcement comes amid growing interest in cryptocurrencies in Nigeria, with many young Nigerians turning to digital assets as a way to store and transfer value.
Hitherto, the use of cryptocurrencies in Nigeria has been largely unregulated, especially after the CBN placed prohibited the banks from facilitating crypto transactions within the country back then in Feb 2021. The law did not proscribe cryptocurrency itself at this point which left many Nigerians wildly confused about the state of cryptocurrency trading within the country.
Consequently, the move to develop a regulatory framework for cryptocurrency by CBN will be expected to address these concerns and provide clarity on the use and acceptance of cryptocurrencies in the country. They also stated that they will soon develop a regulatory framework for the use of stablecoins within the country.
It is not yet clear when the regulatory framework will be put in place, but the CBN has assured stakeholders that it is working to develop a framework to guide the use of cryptocurrency within the country.
One remarkable development in the use of cryptocurrency in Nigeria today is that both the Nigerian government and CBN are now working towards creating a convivial environment for the adoption of cryptocurrency within the country. Thus, the finance bill for 2022 passed in November has pushed for a recognition of cryptocurrency as an investment capital. The bill also pushed for the taxation of all digital assets. “Will Nigeria be the Next African country to legalize crypto？”