Africa’s biggest economy, Nigeria Crypto adoption has hit a snag with the introduction of a new policy which is set to completely eliminate cryptocurrencies from the country’s financial system.
Bloomberg reports that Securities and Exchange Commission (SEC) of Nigeria announced that it will not be including crypto in future plans to improve trading in digital assets.
According to SEC director-general, Lamido Yuguda, “We are looking at digital assets that really protect investors, not necessarily crypto.”
Earlier in May, the SEC published new rules relating to the issuance, exchange and custody of digital assets in the country. Unlike the Central Bank of Nigeria which restricted banks and other financial institutions from engaging crypto-related businesses, the SEC’s rules laid down guidelines for operating crypto-related businesses. These rules included requirements for certain licences and employment of anti-money laundering (AML) measures.
At the time, analysts had predicted that this move by the SEC could boost crypto adoption in the country which was one of the top 10 countries with the highest cryptocurrency transactions in 2021.
Months later, the SEC is not toeing this path but appears to be tilting towards the same direction as the Central Bank of Nigeria (CBN). In 2017, the CBN ordered all commercial banks “not to use, hold, trade and/or transact in cryptocurrencies “ and it reinforced this stance in 2021. It cited reasons such as insecurity and deregulation of the sector.
While the SEC isn’t restricting crypto trading per se, it’s also sharing concerns about the volatility of cryptocurrency. According to Yuguda, the Commission is seeking to promote investment in “serious digital assets”. “The commission is in the business of protecting investors, not in the business of speculation,” the DG said.
Just in case you’re wondering, other digital assets the SEC will be promoting investments in include central bank digital currencies (CBDCs) like the e-naira, security tokens, and tokenised assets.