Nigeria's financial regulator is preparing to license cryptocurrency exchanges. The country's Securities and Exchange Commission (SEC), headquartered in Abuja, is set to unveil its inaugural licenses for digital and tokenized assets this month, Bloomberg reported.
Regulating Crypto
According to the regulator, this move reflects a broader global trend of regulators increasingly seeking to bring crypto markets under formal oversight. Emomotimi Agama, the SEC's Director-General, highlighted the urgency and potential of this regulatory change.
“Being a crypto enthusiast and fintechenthusiast, I can tell you without doubt that this is going to happen sooner than you think,” Agama stated during a Bloomberg Television interview. He emphasized the need to support the country's youth in tapping into fintechopportunities, citing the growing market size.
Nigeria's decision aligns with regulatory actions in other regions. The European Union, South Africa, and Botswana have implemented frameworks to manage digital assets, aiming to stabilize markets and protect investors. These steps come in the wake of a tumultuous period in 2022, marked by significant market crashes and scandals that prompted calls for stricter oversight.
Nigeria’s top finance regulator plans to license crypto exchanges as adoption surges https://t.co/0OulDkPNZx
— Bloomberg Crypto (@crypto) August 20, 2024
In contrast, Nigeria has faced challenges, including a previous ban on banks facilitating crypto transactions. Authorities were concerned about currency manipulation impacting the naira, which has sharply depreciated against the dollar.
The SEC's forthcoming licensing regime aims to address these issues by providing a structured approach to crypto market operations. In addition to the licensing plan, Nigeria is preparing to introduce a new bill by September that will outline tax regulations for cryptocurrency transactions.
Upcoming Legislation and Ongoing Legal Actions
This development is expected to further integrate digital assets into the country's financial system. Meanwhile, legal actions are ongoing against crypto exchange Binance, with allegations of tax evasion and money laundering leading to the imprisonment of one executive.
As Nigeria moves forward with its crypto licensing initiative, the financial sector anticipates a more regulated environment that balances growth with investor protection.
Even as Nigeria prepared to restore sanity in the crypto assets space, some exchanges have suspended operations. Recently, OKX discontinued its services in the region due to changes in local regulations. This step followed months of gradual service reduction, culminating in a complete exit. The crypto exchange specified that all services in the country will cease by August 16.
This article was written by Jared Kirui at www.financemagnates.com.
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