The Securities and Exchange Commission of Nigeria (SEC Nigeria) plans to introduce crypto regulations after the government legalized banks’ involvement in virtual currencies.
On February 5, 2021, the Central Bank of Nigeria (CBN) ordered all financial institutions to no longer allow all transactions with cryptocurrencies. In addition, the highest bank has asked all regulated institutions to identify individuals or organizations involved in cryptocurrency transactions in their systems and to close their accounts immediately.
Banks that did not follow instructions were warned of sanctions. Hence, the nature of the directive led many to believe that the country is banning cryptocurrencies, although the central bank later made it clear that only banks were being denied permission to trade cryptocurrencies.
At that point, however, the country’s SEC stated that it wanted to protect investors.
According to Lamido Yuguda, Director-General, SEC Nigeria:
“We are looking at this market closely to see how we can bring out regulations that will help investors protect their investment in blockchain.”
In this context, the Nigerian Securities and Exchange Commission is aiming to set up a department for cryptocurrencies. Regulators have been under pressure lately, and some experts and stakeholders have asked them to introduce guidelines or frameworks for cryptocurrency transactions in the country, claiming that responsibility should be borne by the SEC and not the Central Bank of Nigeria like others might think.
In April 2021, the Central Bank of Nigeria announced that it was working with the SEC ‘to understand cryptocurrencies.’
Given that the Nigerian Securities and Exchange Commission has stated by 2020 that it will oversee cryptocurrencies when it comes to securities rather than currencies, the regulatory situation is still unclear.
In that respect, the SEC is looking to set up a cryptocurrency department. The regulator has come under pressure in recent times with some experts and stakeholders asking it to introduce guidelines or a framework for the trading of crypto in the country claiming the responsibility falls with the SEC rather than the Central Bank of Nigeria as others may presume.
In April 2021, the Central Bank of Nigeria indicated that it was working alongside the SEC ‘to understand cryptocurrencies.’
The situation around regulation is still not clear given that in 2020, SEC Nigeria said it would be regulating cryptocurrencies with the understanding that they are securities and not currencies.
Crypto Regulation in Other Countries
Just recently, Ukraine passed a law to legalize and monitor cryptocurrencies. For this reason, Bitcoin was recently officially introduced as legal tender in El Salvador.
As the global acceptance of cryptocurrencies continues to grow, the Republic of Panama has tabled a new bill to recognize Bitcoin (BTC) and other digital currencies as alternative payment methods.
Panama’s crypto-backing Congressman Gabriel Silva pointed out on Twitter that the new bill will allow the Central American country to freely use cryptocurrencies. According to Silva, the bill was prepared by various parties, including Panamanians, industrial and technical experts. He also stated that the legislation is in line with guidelines set by the Financial Action Task Force (FATF).