Nigeria is considering a bill that will recognise cryptocurrencies

The Nigerian government is set to pass a law that recognizes the legal acceptability of Bitcoin (BTC) and other cryptocurrencies as means to be in sync with the recent evolution in technology, in other words, a means to keep to tab with “global practices”. 

Punch Newspaper reported on the 18th of December that the bill would look to regulate digital currencies after an interview with House of Representatives Committee on Capital Markets Chairman Babangida Ibrahim. 

The report by Punch revealed that following the approval of the Investments and Securities Act 2007 (Amendment) Bill into law, the local Securities and Exchange Commission will be able to “recognize cryptocurrency and other digital assets as capital for investment.”

One of the legislations proposed is titled, ‘A Bill for an Act to Repeal the Chartered Institute of Stockbrokers Act, Cap. C9, Laws of the Federation of Nigeria, 2004 and Provide for Establishment of Chartered Institute of Securities and Investments; and for Related Matters.’

The other was titled, ‘A Bill for an Act to Repeal the Investments and Securities Act, 2007 and Enact the Investments and Securities Bill to Establish Securities and Exchange Commission as the Apex Regulatory Authority for the Nigerian Capital Market as well as Regulation of the Market to ensure Capital Formation, the Protection of the Market to ensure Capital Formation, the Protection of Investors, Maintain Fair, Efficient and Transparent Market and Reduction of Systematic Risk.’

24 months after crypto operations and involvement were banned in the country in February last year, this news is highly shocking to the growing cryptocurrency community. Earlier last year, the CBN had ordered crypto exchanges and service providers to suspend operations and instructed all traditional financial institutions to block all accounts. 

But. Babangida Ibrahim insists that the passing of the law isn’t a 180-degree turn on the ban but rather a secondary review of what is within the scope of the CBN’s powers:

“It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria.”

“We need an efficient and vibrant capital market in Nigeria. To do that, we must be up to date with global practices.”

“Recently, there have been a lot of changes within the capital market, especially with the introduction of digital currencies, commodity exchanges, and so many other essential things that need to be captured in the new Act. As I said, it is better to talk about this after consideration of the reports.”

“All these are some of the issues that we have considered. We have to regulate them. It is not that they are illegal, but we don’t have regulations for them. So, these are some reasons we need to review the Act and put some regulations for most activities – derivatives, commodity exchanges, digital currencies, and so many other things.

“When it comes to digital currencies, they have different names, and it depends on the jurisdiction. These currencies don’t have boundaries. You can stay in Nigeria and invest in the United States, Canada or anywhere.

“When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them,” he explained.

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What does this mean for the Nigerian cryptocurrency community?

The approval of this bill means that amendments will be made to Nigeria’s Investments and Securities Act 2007. It will allow the Securities and Exchange Commission to recognise cryptocurrency and other digital funds as capital for investment.

Alongside this bid to legally recognize Bitcoin and other cryptocurrencies, the law will reveal the regulatory functions of the Central Bank of Nigeria and Nigeria’s Securities Exchange Commission (SEC) as regards digital currencies.

This announcement comes in a period where Nigerians have turned apathetic towards the incorporation of Nigeria’s central bank digital currency, the eNaira. According to reports, the eNaira has only gotten an underwhelming 0.5% adoption rate in October, 12 months after its launch.

The Nigerian government failed to discourage Nigerians from cryptocurrency as its adoption gained height, even after the government officially banned and promised to punish an account affiliated with crypto activities appropriately.

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Nigerians have exhibited an impressive curiosity and love for the cryptocurrency ecosystem. From January 2021 to February 2021, Nigerians have only been surpassed by Americans as regards searching for cryptocurrency and investing heavily in Bitcoin. Within that same period, Nigerians happened to be the most likely to search for “Bitcoin” on Google, more than any other country.

According to a report, CoinGecko revealed that Nigerian residents were the most crypto-curious country—this shows that Nigerians are very interested in the trajectory of cryptocurrency. In October, TechNext hosted the largest blockchain event in Africa, which drew a massive crowd.

Nigeria also recently began an early-stage discussion with cryptocurrency exchange Binance in September to develop a crypto-friendly economic zone that will support crypto and blockchain-related businesses in the region. The Nigerian cryptocurrency community will receive this news will glad hearts and smile-shaped faces, looking forward to the amazing things they will do with cryptocurrency in Africa and the world.