Nigerian Crypto Transactions Get a Big Boost With Government Backing

Key Points:

• Nigeria’s SEC plans to license virtual asset providers, including cryptocurrencies.
• The move aligns Nigeria with global regulations and follows concerns over the naira’s depreciation.
• Despite government crackdowns, Nigerian crypto transactions remain robust, with the SEC aiming to formalize the market and ensure transparency.

The Securities and Exchange Commission of Nigeria is getting ready to license virtual asset providers, including cryptocurrency platforms, in a bid to explore opportunities as the adoption of digital currencies increases in the country.

Read more: Binance Exec Tigran Gambaryan Is Still Waiting for Hope to Be Released in Nigeria

Nigeria SEC Set to License Cryptocurrency Providers on Increased Adoption

According to Bloomberg, the move will put the country on the same level as the rest of the world in relation to regulation, following countries such as the European Union, South Africa, and Botswana in licensing cryptocurrency providers.

The DG of SEC, Emomotimi Agama, declared that the first license on digital means and tokenized assets would be handed out this month by the commission. He expressed the belief that the nation’s youth must be guided on how to leverage fintech innovations, as the market for any such tech is wide and highly proliferating.

Nigerian Crypto Transactions Continue To Flourish Despite Regulatory Hiccups

For recent years, number of challenges that the government has been going through with regard to Nigerian crypto transactions. Authorities had banned banks from processing Nigerian crypto transactions, citing worries over exchange rate manipulation coupled with naira sharp depreciation.

In February, the government cut off access to Binance—the world’s largest crypto exchange—and prosecuted its executives for allegedly contributing to illicit financial flows and speculative activities that weakened the naira.

Despite this, enterprising Nigerian youths have simply continued to trade Bitcoin through alternative platforms like Bitkoin Africa and Quidax. According to an analysis report, volumes of Nigerian crypto transactions leapt 9% to $56.7 billion in June 2023 from a year earlier. The figure is just the tip of the iceberg, Agama said, as many transactions are not reported.

The new licensing is a plan by the SEC to formalize the market so as to ensure increased transparency, and to prohibit the use of cryptocurrency in diminishing the national currency.