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Nigeria to develop the legal framework for ICOs and stablecoins

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Nigeria expresses its willingness to allow the existence of private stablecoins as well. Nigeria was one of the world’s pioneers in introducing its own central bank digital currency (CBDC). The most recent central bank policy document makes note of the need to establish a legal framework for stablecoins.

The Central Bank of Nigeria (CBN) research, titled “Nigeria Payments System Vision 2025,” is 83 pages long and examines the creation of a legal framework for the future introduction of a stablecoin. Given that stablecoins are likely to succeed as a payment system in the nation, the document claims that a framework needs to be created.

The regulation of initial coin offerings is also covered in the paper (ICOs). It emphasizes how there is now no regulation in the region, which resulted in losses for the investors. The CBN, however, sees promise for ICO adoption as a fresh method of crowdfunding, peer-to-peer lending, and capital project funding. As a result, “in the case of adoption of an ICO-based investment solution,” a regulatory framework is also required.

The report’s section on stablecoins and initial coin offerings, however, is much shorter than the one devoted to the Nigerian CBDC, eNaira. It may “allow transformation” in the national economy, according to the Central Bank. In three to five years, it wants to have the currency fully operational.

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In an effort to further its “cash-less Nigeria” strategy and promote the usage of the eNaira, Nigeria has cut the amount of cash that individuals and businesses can withdraw to $225 and $1,125 each week, respectively, as of December 2022.

Since its debut in 2021, a CBDC has had a low adoption rate. Less than 0.5% of the population was estimated to have used the eNaira as of October 25, 2022, a year after its inception, according to Cointelegraph, indicating that the CBN has had difficulty persuading its people to utilize the digital money.

See Also: How Nigeria Plans To Successfully Commercialize Its Intellectual Property Rights

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