The major regulatory institution of the Nigerian capital market, the Securities and Exchange Commission (SEC), has announced that it has created a new department that will study the digital currency market and crypto, in a bid to have regulatory policies for the sector.
TechBooky reports that the SEC’s Director-General, Mr. Lamido Yuguda in an interview with Reuters on Thursday, September 2, 2021 said the agency is looking at the market closely to see how it can bring out regulations that will help investors protect their interest in blockchain.
According to Yuguda, the commission is seeking ways to regulate the crypto market as crypto reading is a security transaction, with the regulation expected to be in full force immediately crypto transactions are permissible in the Nigerian banking system.
It would be recalled that the Central Bank of Nigeria had stopped the transaction of digital currencies in the Nigerian banking system, but it is believed that the SEC information is an indication that crypto may be reintegrated back into Nigeria’s banking transactions. The commission says it seeks to work with fintech firms to boost the marketing of domestic securities, which in turn will prevent capital flight.
Digital Currency industry experts are of the opinion that SEC’s decision, though a welcome development should have come earlier, so that local fintech and crypto companies will be allowed to bring their resources together to support the SEC, while also helping the banking institution proffer policies that drives economic development.
Founder/CEO of Walletcloud and an Ethereum Blockchain Engineer, Mr. Mayowa, while reacting to the development told said:
“This would have probably led to the fastest regulation development ever in the country had it came earlier than now. But if all goes well, restrictions on the Banking system from supporting crypto payments might be lifted”.
The Security and Exchange Commission (SEC) further noted that the organization and not the Central bank of Nigeria (CBN) is saddled the task of creating a framework for crypto trading in Nigeria, while adding that the recent launch of Nigeria’s digital currency, e-naira is an indication of the commissions alignment with the CBN.
In spite of the CBN restrictions on crypto trading, the digital currency sector in Nigeria has continued to grow in the wake of the unemployment rate of the Nigerian youths, who see the sector as a veritable tool to generate income as they trade in goods and services. The Nigerian market has the second largest crypto market in the world as even the volume of crypto traded this year through peer to peer (p2p) platforms has doubled that of last year already. More crypto-based companies are investing in crypto-education and more businesses and freelancers are willing to get paid in crypto.
Mayowa further posited that: “All of these market signals are weakening the naira against the US dollar and that’s not good for the government. One of the fundamental principles of crypto is decentralization – no single source of control. What the SEC is trying to do is to come up with policies that would give them as much control as possible. It will be nice to see the reaction of the market to the policies they come up with”.
Ayoola Faseyi, an Abuja based Journalist with interest in Technology and Politics. He is a versatile writer with articles in many renowned News Journals.
He is the Co-Founder of media brand, The Vent Republic.
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