Nigeria SEC introduces New Digital Assets Regulations

Nigeria was the second country to launch a CBDC (eNaira) on the 25^th of October 2021 after the Bahamas. 

As Nigeria is still considered one of the most ‘unbanked’ countries in the world, decentralized identity systems and CBDCs will provide the population with a way to prove their identity and get access to banking services directly from their smartphone. It also means that every transaction will go through that system in order to buy and sell things.

Ben Constantly, co-founder of Smartlink

President Muhammadu Bahari of Nigeria stated:

This payment system now provides high-value and time-critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria

Being one of the leading countries for crypto adoption globally, Nigeria has benefitted from crypto over the years from hedging hyperinflation to lowering the costs of cross-border remittances and improving financial inclusion for the unbanked population.

Cryptos have provided a sufficiently liquid fiat alternative for naira holders looking to exit the local currency

Uwa Osadiaye - Senior Vice President at FBNQuest Merchant Bank.

The Securities Exchange Commission of Nigeria has released a new set of regulations in an attempt to offer guidance with regard to the issuance, custody and exchanges of digital assets. According to the new regulations, digital assets would be classified as securities, regulated by the commission.

Exchanges will need the permission of the SEC to list any asset; they’ll have to apply for the listing, and the Commission must have no objection to such assets.

The SEC also provided guidance for ICOs and token issuance. Companies operating in the country or servicing Nigerians will need first to register their intent to issue a token. Then, it’s up to the Commission to issue approval. For tokens deemed as securities, the issuer must also follow securities laws

The new regulations aim to offer transparency and protect investors in the country after last year's announcements that The Central Bank of Nigeria (CBN) has instructed that all bank accounts relating to cryptocurrency trading in the country be closed by all financial institutions.

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