The Securities and Exchange Commission of Nigeria claims that it backs digital assets but not "crypto."
The body regulating the securities industry in Nigeria has lately distanced itself from the concept of "cryptocurrencies," declaring that it will only encourage investment in "sensible digital assets."
Bloomberg reports that the Securities and Exchange Commission (SEC) has said that "cryptocurrencies" will not be covered by the regulatory framework it is making. Instead, the framework's primary goals are to facilitate more efficient trading of digital assets and to shield investors from risk.
Nigeria's relationship with digital currencies has been a mess in the past, but the country in West Africa is still the most important market for digital currencies on the African continent and is responsible for most transactions outside of the United States.
This year, Nigeria was ranked 11th in the world for adoption by Chainalysis, ahead of the United Kingdom and Indonesia, while Coingecko in August ranked Nigeria the "Most Curious Nation" about crypto.
In February 2021, the Central Bank of Nigeria restricted financial institutions from approving cryptocurrency transactions after the CBN passed a bill requiring all Nigerian bank accounts associated with cryptocurrency trading platforms (exchanges and wallets alike) to be shut down.
See Also: Naira redesign: CBN pledges to protect rural Nigerians
The government has also tried to stop the spread of digital currency in indirect ways, like with its "Naira for a Dollar" plan, which tried to promote traditional methods of transferring money to compete with digital currency.
"We are looking at digital assets that protect investors, not necessarily crypto," Director-General Lamido Yuguda said to the media in Lagos this week. "We are looking at digital assets that protect investors."
Since the publication of the SEC's guidelines on digital assets in May, there have been several inquiries over whether or not they offer protection for digital currencies such as Bitcoin.
Although it went into great length on initial coin offerings (ICOs), the segregation of customers' funds, custody, key generation and administration, and other crucial topics, it was pretty ambiguous on the distinction between "crypto" and digital assets. This week, Yuguda made it clear for the last time that the digital currency industry still needs the legal clarity it has been waiting for for many years.
According to his statement, "the commission is not in the business of speculation but rather the business of protecting investors".
In stark contrast to the rapid adoption of digital currencies, the country's central bank digital currency (CBDC), the eNaira, has failed to capture the attention of more than 200 million Nigerians. Amidst the government's continued efforts, the eNaira continues to struggle, having taken 10 months to reach $10 million in transaction volume.
