Nigeria SEC Suspends Crypto Regulatory Plans Amid Central Bank Ban

Nigeria’s securities regulator, the SEC has backed the central bank’s crypto ban by suspending its planned regulatory framework for digital assets.

February 15, 2021 | AtoZ Markets – The Securities and Exchange Commission (SEC) of Nigeria has put a hold on its cryptocurrency regulatory plans following the recent ban on financial institutions from providing cryptocurrency exchange services to central banks.

Nigeria's SEC puts crypto regulations plans on hold

In an email statement quoted by the Daily Post, the SEC said:

"For the purpose of participating in the'SEC Regulatory Incubation Framework', the assessment of all persons (and products) subject to the Central Bank of Nigeria's Directive dated February 5, 2021 states that such persons are Nigerian banks. It will be held until the system can handle bank accounts. "

The committee approved digital assets in September 2008. The SEC then announced that it would build a "sandbox" of cryptocurrency regulation as part of its efforts to fully regulate the market.

For the SEC, the statement is in response to stakeholder inquiries regarding the policy contradictions believed to lie between the September announcement and the central bank directive. According to the committee, the proposed sandbox of regulations on non-cryptocurrency fintech companies focusing on capital markets will continue as planned.

The central bank's reaction to the ban on cryptocurrencies has diverged national and geopolitical boundaries, and progressive factions seem to be more willing to oppose the move. The central bank has described the move as a measure to prevent the use of cryptocurrencies by criminal organizations in Nigeria.

Nigerian lawmakers oppose the CBN's crypto ban

CBN's actions have outraged the country's legislature, as only Nigeria's parliament or senate can pass laws.

Nigerian Congressman Solomon O. Adeola believes that such a ban is too drastic a measure for crypto assets. Cryptocurrencies are regulated all over the world, so the CBN must develop clear rules to control this activity. The Senate emphasized the need to "sit down at the negotiating table" with regulators so that each agency can state its own position on cryptocurrencies in Nigeria. Many congressmen take the same position.

Senator Sani Musa said Bitcoin has stripped Nigerian naira of value, rendering it useless. He noted that cryptocurrency transactions take place all over the world, and due to their confidential nature, it is difficult to determine the owner of digital assets. The newest technologies are so powerful that it is unclear how they should be regulated. However, this must be done. If Nigeria's regulators are unable to control crypto assets in such a weak economy, then it is not clear what the country will be like in a few years, Musa said. Senator Biodun Olujimi also believes cryptocurrencies will help boost Nigeria's economy.

“We didn’t create cryptocurrency, so we cannot eliminate it. We cannot escape her influence. The cryptocurrency industry is developing with good results. Nigeria is unable to insure itself against it. You just need to make sure that crypto assets are not used to harm. The time has come to agree on all issues related to cryptocurrencies,” Oluzhimi said.

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