2 months ago

    Is the Nigerian government changing its stance on crypto?

    Is the Nigerian government changing its stance on crypto?
    Table of contents

      This image has an empty alt attribute; its file name is zfAWKrpuhYG451xzPryydHLLxGbXeWxHOToyI3pF0LXjbaBdkoQv4g4ejfNADNDDcsh5Amx0_7o4n3xGAbP7YMQwVZVwPmY0JtdtteCNIaZeltQGJ1Q75pr8c03A2EQu6jIj9g-L-p8yiUkKPg

      Abuja, Nigeria. David Rotimi/Unsplash

      • Nigeria’s once hostile crypto regulations seem to be changing.
      • The country is planning an e-naira upgrade to enhance the use of its digital currency.
      • A rulebook was recently published, laying down regulations for exchanges.

      A changing perspective

      Governments around the world are generally hostile toward crypto. Some are skeptical, some are critical, and some are flat-out unsupportive. The Nigerian government falls under the law category. In a circular dated February 5, 2021, the Central Bank of Nigeria ordered Nigerian banks to stop facilitating crypto transactions.

      “Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited,” the circular read in part.

      However, the government seems to be changing its stance on crypto in recent times. On October 25, 2021, it launched the e-naira digitizing the country’s national currency, the Nigerian Naira.

      Issued by the Central Bank of Nigeria (CBN), the digital currency allows Nigerians to do the same thing with the Naira, only in an easier way. Although the CBN claims the e-naira can be a store of value, that reality does not seem possible with the ever-increasing inflation in the West African country. As of April 2022, the country’s inflation rate was 16.82%, the highest in almost 8 months.

      An e-naira upgrade is in the works

      This image has an empty alt attribute; its file name is 0L_xZbegfMlHC8wrfg5rNn28BKfEV9tiGLg_LcITkcYmIkKBREczUFQZFs0ThroTgnOMV3Hc1_PZcWqGCM98Ik-y9HH8mwxruBu-gZJdc_0AyXN6N4eVGY2b9srFWo1HT-VyO2cen1l7WBN4kg

      When launched, the e-naira’s purpose was to:

      • Encourage the inclusion of people of classes into a growing financial system
      • Make it easier to send and receive money from other countries
      • Monitor illegal transactions
      • Reduce the occurrence of illicit notes and the cost of maintaining physical naira.

      Now, the government wants to go further with an e-naira upgrade. An e-naira upgrade will allow people to use this CBDC to pay for everyday needs like electricity bills, airtime purchases, and flight tickets. This upgrade will definitely encourage more Nigerians to try out the new currency.

      An e-naira upgrade might get more Nigerians to use the e-naira, but it might not encourage more Nigerians to dive into cryptocurrencies in general. Why? It is difficult for an ordinary Nigerian to buy cryptocurrency. Before the ban in February 2021, Nigerians could buy cryptocurrencies directly from their bank accounts or debit cards. Now, that’s not the case. They have to use peer-to-peer gateways, sending money from one person to another, before they can buy or sell crypto.

      A new rulebook comes to the rescue

      The Securities and Exchange Commission (SEC), the leading financial regulatory body in Nigeria, published a rulebook that will change the citizen’s view of crypto. Instead of labeling crypto as ‘illegal,’ the SEC has chosen to include it under its umbrella of digital assets.

      What does this mean for crypto traders and exchanges in Nigeria? Crypto exchanges can operate in the country but must follow some laid-down rules. One of the rules is that they need to have at least $1,200+ in capital and present a list of all assets they wish to include on their platform.

      It means that crypto is no more an illegal asset for crypto traders. Previously, possession of crypto or crypto apps could attract the attention of the Nigerian police, who would make anyone uncomfortable having such on their devices.

      This image has an empty alt attribute; its file name is s7ajn2LbMH9AOOmM6LvvDfF5z3K1xI5j_T2zrm9e7ICSvbNqiynhAl2qq2hmXt-dQnGD8D1n0aBI0tm4Hf2yAhHwbuPOp1ADGHVPURFPEAyUtwBzbJcqkxjNyZhc_KyFJhw3AqvVPVMfnfK8Rg

      Hopefully, the SEC’s circular, “New Rules on Issuance, Offering Platforms and Custody of Digital Assets,” would allow for more flexibility in the country regarding crypto assets. Banks are still not allowed to facilitate crypto transactions, and most Nigerians still believe the government does not welcome cryptocurrency.

      FAQs

      Is e-naira a stablecoin?

      No. The e-naira is not a stablecoin. It is pegged to the Naira, which undergoes steady inflation.

      Cryptocurrencies
      What is Dogecoin
      What is Dogecoin? The cryptocurrency industry has been growing by leaps and bounds in the past few years, but it still isn’t quite mainstream. One o...
      2 years ago
      Cryptocurrencies
      Bitcoin: the good, the bad, and the ugly
      The good Deflationary Inflation, or the decline in the purchasing power of most currencies, is something we’re all unfortunately familiar with. Over...
      2 years ago
      Crypto
      How the Choice of Payment Methods Impacts Security and Speed in Sports Betting
      The sports betting revolution has swept the world in the last 20 years. It has opened up new possibilities for sports fans and betting companies, as t...
      1 year ago

    Crypto insights delivered straight to your inbox

    Subscribe to our newsletter, you are in very good company

    Loading
    This is not financial advice. Coincub is an independent publisher and comparison service. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. This space changes rapidly and evolving, so please make sure to do your own research. Although we do our best to provide you the best information, we cannot guarantee the accuracy or applicability of any information on this site or in regard to your individual circumstances.