Tokens but not crypto: Nigeria SEC prepares new digital asset rules

Nigeria, 1 of the world’s most funny nations astir cryptocurrencies similar Bitcoin (BTC), is preparing caller manufacture regulations for integer plus platforms.

The Securities and Exchange Commission (SEC) of Nigeria is considering allowing licensed integer exchanges to database tokens backed by definite assets, Bloomberg reported connected May 1.

According to SEC caput of securities and concern Abdulkadir Abbas, the authorization plans to lone authorize listings of tokens based connected assets similar equity, indebtedness oregon property. Cryptocurrencies similar Bitcoin (BTC) oregon Ether (ETH) volition not beryllium among those assets, Abbas reportedly said.

Nigeria’s SEC aims to registry fintech firms arsenic integer sub-brokers, crowdfunding intermediaries, money managers and tokenized coins issuers. The authorization volition not registry crypto exchanges until the cardinal slope provides wide regulations for the crypto market.

Abbas noted that licence applicants volition acquisition a twelvemonth of “regulatory incubation” allowing the SEC to survey their operations and renter their services successful the country. He added:

“By the 10th month, we should beryllium capable to marque a determination whether to registry the firm, widen the incubation play oregon adjacent inquire the steadfast to halt operation.”

As antecedently reported, the Central Bank of Nigeria banned section banks from providing services to cryptocurrency-related platforms successful aboriginal 2021. For the ban, the regulator cited precocious risks associated with trading cryptocurrencies similar Bitcoin. The cardinal slope besides promised to instrumentality strict penalties to immoderate lender oregon fiscal instauration that fails to comply with the directive.

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Despite the ban, Nigeria has emerged arsenic 1 of the astir progressive countries successful presumption of adoption and curiosity astir Bitcoin and different cryptocurrencies.

According to information from Google Trends, Nigeria ranks No. 2 by hunt involvement for the keyword “Bitcoin,” 2nd lone to El Salvador, which adopted Bitcoin arsenic ineligible tender successful 2021. Other jurisdictions successful the top-five crypto-curious countries database see Slovenia, Netherlands and Switzerland.

Interest successful crypto by country. Source: Google Trends

According to Chainalysis’ crypto adoption index, Nigeria was besides among the apical 20 countries successful presumption of crypto adoption successful 2022.

While prohibiting cryptocurrencies, the Central Bank of Nigeria has been actively promoting its cardinal slope integer currency known arsenic eNaira. Following a sluggish start, eNaira reportedly saw accrued adoption owed to nationalist fiat reserves facing terrible shortages.

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