There is both optimism and apprehension surrounding Nigeria’s cryptocurrency industry. Industry stakeholders have expressed concerns about the lack of clarity in the sector due to the actions and policies of President Bola Tinubu’s government over the past year.
President Tinubu had promised to legalize crypto and blockchain technology for the country’s banking and finance sector, recognizing its potential to strengthen Nigeria’s fragile economy. However, recent actions by the administration have left the young population feeling confused and uncertain about the future of the crypto industry.
Olumide Adesina, an analyst at Quantum Economics, stressed the need for clarity and support to unlock the sector’s potential. Adesina highlighted that the crackdown on peer-to-peer trading, the arrest of a Binance executive, and accusations of currency manipulation by state officials have temporarily tarnished the image of the industry, despite the high level of interest from Nigeria’s dynamic youth.
Nathaniel Luz, the CEO of Flincap, a liquidity platform for crypto exchanges, believes that President Tinubu has a unique opportunity to shape Nigeria’s emerging crypto sector, similar to how previous leaders shaped the banking industry. Luz emphasized that the crypto industry is maturing, and it is crucial for the administration to take decisive action.
In the past year, the Nigerian Securities Exchange Commission (SEC) published regulations for digital assets, indicating a middle ground between a ban and a lack of regulation. In December, the SEC lifted its ban on banks operating accounts for crypto service providers, while the central bank recognized the need to regulate VASPs (Virtual Asset Service Providers), including cryptocurrencies and assets.
The Central Bank also released initial guidelines for banks opening cryptocurrency accounts in January, although trading and holding virtual assets within bank portfolios remains prohibited. The guidelines include stringent anti-money laundering and know-your-customer measures, as well as prudent transaction limits and restrictions on cash withdrawals from crypto accounts.
In May 2024, the Nigerian government started preparing new regulations to ban P2P cryptocurrency exchanges that use the national currency, the Nigerian naira.
As the crypto industry continues to evolve, the question of how much enforcement is necessary to ensure its integrity remains an important topic for discussion.
Original source: https://cointelegraph.com/news/nigeria-s-cryptocurrency-industry-lacks-clarity-as-tinubu-s-government-takes-action