Nigeria has put forward a significant legislation design that will further facilitate cryptocurrency adoption in the country with over 200 million inhabitants.
Why this matters: If the Investments and Securities Act, 2007 (Amendment) Bill passes, the Nigerian securities and exchange commission (SEC) will recognize cryptocurrencies and other digital assets as capital for investment.
- Babangida Ibrahim, Chairman of the House of Representatives Committee, shared in an interview with local media outlet Punch, that the proposed bill will specify the roles of the Central Bank of Nigeria and the country’s SEC in regard to cryptocurrencies.
- Ibrahim stated that the bill is not a complete shift away from restrictive laws in place, only a review of what could be done within the current legal framework. However, he does believe that Nigeria must keep up with global economic innovations.
- Notably, the Nigerian Export Processing Zones Authority (NEPZA) stated in a press release in September that it considered partnering with crypto exchange Binance to create a virtual free zone to promote economic growth.
Go deeper: The legal blueprint comes at a time when Nigeria has spent almost 2 years under a cryptocurrency ban for financial institutes, and the country’s CBDC, the eNaira, has failed to reach widespread adoption.
- Since the launch of the CBDC in October 2021, it currently sits at an adoption rate of only 0.5% among the population.
- Further endorsement of the eNaira could be hampered by the legal blueprint. “This bill is basically going to create more adoption of cryptocurrencies. Through regulation of this asset class, we might start to see taxing and legal registration if you want to build something in the blockchain space,” says Anointing Aha, Community Manager for Nigeria at global crypto exchange LBank.
- For now, Nigeria seems to be moving towards further adoption, but nothing is set in stone. “Nigeria’s presidential election is coming up early next year, and a lot will depend on the new president,” Aha adds.