Emmanuel OchayiFollowing a Monday meeting between the Securities and Exchange Commission SEC and operators of digital assets, Nigeria’s $56.7 billion peer-to-peer market in crypto is being considered for suspension by the government.
Given increasing concerns about illegal activity and manipulation of the naira exchange rate, this measure will be taken.
The 2023 Geography of Cryptocurrency Report by Chainalysis states that between July 2022 and June 2023, the amount of cryptocurrency transactions in Nigeria increased by 9% annually to $56.7 billion.
On the other hand, the Central Bank of Nigeria (CBN) has banned large fintech companies from accepting new clients while it is in the process of examining their Know Your Customer procedure and the SEC proposes a 400% increase to registration fees for crypto firms.
There are 33.4 million people trading cryptocurrencies, and many of them are using it as a major source of income. The proposal for a suspension of P2P trade has resulted in criticism.
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However, to have time to develop a comprehensive set of regulations for the space, the government may decide to declare a temporary stop to P2P cryptocurrency trading.
To address concerns about market manipulation and illegal activity, industry stakeholders, such as the Stakeholders in the Blockchain Technology Association of Nigeria (SiBAN) and the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), are attempting to find a middle ground with regulators.
The SEC has amended its standards, which include criteria for AML/CFT/CPF onboarding and registration, for suppliers of digital asset services. It is unclear when the proposed guidelines will be reintroduced, though, as they have been removed from the SEC’s website.
Industry experts emphasize the need for urgency in addressing deficiencies within the fintech ecosystem, citing the ongoing struggle of the apex bank to effectively regulate them.
The Monday meeting is expected to provide clarity on the government’s stance on crypto regulation and the future of the $57 billion crypto businesses in Nigeria.
“We want to ensure that investors who decide to get involved in digital asset products are well protected. We want a platform where certain capital market functions are duly segregated.” – Former SEC DG, Lamido Yuguda
“The meeting is for us to try and bring the industry to be compliant and remove bad actors who abuse technology, especially the concern raised by the government on those that use the technology for market manipulation of naira.” – BICCoN Chairman, Lucky Uwakwe
“There is a whole lot going on. It is not just clear the direction as we speak, but hopefully, on Monday, we will get to have a position.” – SiBAN President, Obinna Iwuno
