Nigeria’s central bank to draft crypto rules with SEC

The Central Bank of Nigeria (CBN) has announced plans to work with the Nigeria Securities and Exchange Commission (SEC) to develop the right regulatory framework for digital assets in the country. This development was revealed by Olayemi Cardoso, the Governor of the CBN, who spoke at a lecture series in Lagos.

According to Cardoso, the CBN is expected to partner with the SEC to develop the crypto regulatory framework as they aim to create a sustainable framework for digital assets in the country. At the annual lecture series at the Lagos Business School, Cardoso noted that the future currency policy of the country is expected to be impacted by digital assets, fintech, and blockchain. However, he added that the extent of their influence remains uncertain at this time.

The Central Bank of Nigeria will work with the SEC on crypto regulation

In his statement, Cardoso claimed that the collaboration is expected to ensure that all different angles of regulation with respect to digital assets are considered. “We are deeply in collaboration to ensure that all the different regulatory authorities can midwife the process that is sustainable with respect to digital currency,” he said. He mentioned that Nigeria had gained global attention in the crypto space years ago.

The CBN governor also mentioned that while the country has gained quite a reputation for its crypto exploits, there have been talks about regulations since then. He also recalled two years ago when the country gained global attention after regulators faced challenges in controlling crypto exchange markets. “Suddenly, over a period of time, coin exchange became very difficult to protect. Many people, not just youngsters, turned to crypto, and a whole architecture started to evolve,” he said.

As previously reported by Cryptopolitan, the Central Bank of Nigeria, in early 2021, ordered traditional banks and other financial institutions in the country to refrain from providing banking services to crypto platforms and individuals. The CBN also ordered financial institutions to close down all accounts of individuals affiliated with digital assets. At the time, the bank claimed that the directive was intended to curb risks related to money laundering and terrorism financing, a means it said was to protect consumers in the absence of regulations.

Changes to crypto rules and taxation

After two years, the apex bank announced that the ban on digital assets in the country was lifted in December 2023. At the time, the bank issued a guideline to financial institutions under its regulatory purview regarding their banking relationships with Virtual Assets Service Providers (VASPs) in Nigeria. Cardoso, in his latest statement, also stressed that steady policies and ongoing reforms have helped rebuild confidence in Nigeria’s economy, a development that has sparked interest from global investors.

Meanwhile, Nigeria has announced several changes to its crypto rules as the country is aiming to have digital asset transactions regulated and taxed. According to a previous Cryptopolitan report, the SEC confirmed that it is working on creating new rules that will subject all eligible transactions to taxation. A bill to that effect is expected to be passed soon. “The SEC acknowledges the substantial amount of tax revenue that will accrue from cryptocurrency transactions,” the regulator reportedly said at the time.

Nigerians have endured a rocky road since the CBN lifted its ban on digital assets. For instance, since the announcements, crypto traders, who consist of the country’s youthful population, have still not openly carried out crypto transactions. Issues bordering on police persecution in relation to crypto activities are still being reported across the country. In some cases, police have mandated some of their victims to part with large sums of money for owning a crypto account or dealing in transactions.

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