Nigeria’s new financial markets laws now officially recognizes cryptocurrencies and other virtual assets as securities for the first time, as it gears to drive a more financial inclusive, and transparent economy.
This is coming after, President Bola Ahmed Tinubu signed into law the Investments and Securities Act (ISA) 2024, which repeals the Investments and Securities Act No. 29 of 2007.
The Act recognises virtual/digital assets and its operations as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges them to be under the SEC’s regulatory framework.
Emomotimi Agama, Director-General, SEC, has lauded the bold move as a transformative step for the capital market said the new law will boost investments in digital assets.
SEC’s Effort in Combating Crypto Related Fraud In Nigeria
Concerns of fraudulent activities in the digital space has been addressed, as all business operating digital assets in the country must register with the SEC and comply with the regulatory body’s guidelines. This is to build trust, confidence and, innovation in the blockchain technologies.
As the SEC head had previously in 2024, reiterated the commission’s effort to combat fraud in the industry. It developed and released comprehensive frameworks aimed at regulating Virtual Asset Service Providers.
Agama emphasised that those frameworks were designed to maintain market integrity while encouraging innovation.
He noted, “Through this approach, we have created a Regulatory Incubation Programme within which new technologies and digital assets can be tested and approved for public use.”
Nigeria and Its Cryptocurrency Regulatory War
Since 2015, which ushers in a widespread adoption of cryptocurrency in Nigeria, with Nigeria being amongst the countries with the highest holder of Bitcoin and cryptocurrency. The Nigerian cryptocurrency community has severally suffered setbacks in going about its operations, this is as a result of the country’s passive legal stance on cryptocurrency related activities in the country.
The event of 2020 “End SARS” public protest whereby the CBN restricted Bank accounts of some persons linked to the protest. Nigerians resorted to using cryptocurrency as a means of donation to fund the protest. This Kickstarted the governments fight against cryptocurrency related activities in the country.
As the Federal Government through the Central Bank of Nigeria in 2021, issued a circular prohibiting domestic banks from processing cryptocurrency transactions. It further directed the banks to close accounts linked to cryptocurrency trading. Citing concerns about money laundering and the financing of terrorism as the reason for such move.
This didn’t deter users as they resorted to Peer-to-peer (P2P) enabling platforms to carry out their transactions without the interference of the banks — implying that the governments effort has been unsuccessful.
However the government has not relented in its efforts to fight cryptocurrency trading in the country. As several cases of money laundering has been reported, carried out through the aid of cryptocurrency. This has made some major cryptocurrency companies to vacate the Nigerian market.
What The Development Spells For Nigerians
Financial Inclusion: new development brings forth financial opportunities for Nigerians, enabling a robust financial inclusive economy, where actors can play without fear of authorities.
Growing Adoption: Increasing cryptocurrency adoption in Nigeria contributes to higher trading volumes and liquidity.
Exchange Revive: Nigeria can now open it’s arm to those companies that have left the country’s financial market. Giving them an avenue to further establish its operations or presence in the country.
Final Thoughts
This new development comes as a laudable effort in the governments approach in tackling problems of economic empowerment and economic growth for the country.
Cryptocurrency players can now heave a sigh of relief, giving them a boost to explore financial opportunities. Although we hope this is a finalized stance on the matter to avoid inconsistencies in regulations.
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