The Nigeria crypto market has been one of the fastest-growing crypto regions in recent years; however, despite this growth, there appears to be no regulation. The latest report from Bloomberg has signaled a shift may finally be on the horizon.
According to the report, Nigeria’s Securities and Exchange Commission (SEC) is now trying to regulate the digital currency market as digital asset adoption continues to surge nationwide.
Digital Asset Regulation In Nigeria: A New Era?
Bloomberg highlighted that the country’s regulatory body, based in Abuja, plans to issue licenses to virtual asset providers, including cryptocurrency exchanges, as early as this month. Director-General Emomotimi Agama noted:
The SEC wants to provide a platform where people can formerly do these things and we are able to get all of the information that we need. (…) We must support the youths of this country to be able to achieve the benefit that is accruable in fintech.
This move to regulate crypto comes as the West African nation experiences an increase in crypto-related activities, driven by a young and tech-savvy population eager to tap into the opportunities offered by fintech.
The SEC’s initiative is part of a broader effort to align Nigeria with other global jurisdictions that have already implemented regulatory frameworks for digital assets.
The SEC Director-General Agama highlighted the importance of supporting the country’s youth in leveraging the benefits of fintech, noting that the market size is substantial and continues to grow.
Citing data from Chainalysis, Bloomberg revealed that the growing adoption of digital currency in Nigeria is quite evident, especially in its volume, which increased by 9% to $56.7 billion in June 2023 alone.
However, Agama believes this figure represents only a fraction of the actual market activity, given that many transactions go unreported.
Nigeria’s Backstory With Cryptocurrency
Nigeria has a long history of cracking down on the cryptocurrency industry, as in other regions. In 2021, the Central Bank of Nigeria (CBN) issued a statement prohibiting banks in the region from facilitating any cryptocurrency-related transaction.
Citing concerns about the market manipulation of the naira–the country’s currency, this move by the CBN sparked a series of controversies among the crypto users in the country.
Although they eventually found a way around it, the Nigerian government moved further in its crackdown to clamp down on the region’s most used digital currency exchange, Binance, in February 2024.
Binance executives faced prosecution over allegations of contributing to the naira’s depreciation by engaging in speculative activities and failing to pay taxes.
Despite these crackdowns, the country’s crypto community remains resilient, with increasing adoption and continuity in bypassing the government’s crackdown on its beloved industry.
Featured image created with DALL-E, Chart from TradingView