The crypto industry in Nigeria is in a state of confusion and uncertainty due to the policies of President Bola Tinubu’s government. Despite earlier promises in his campaign manifesto to legalize crypto and blockchain technology for the banking and financial sector, industry stakeholders remain concerned about recent developments.

Unique opportunity to develop growing crypto sector in the country

President Tinubu’s promise was initially seen as an opportunity to stimulate Nigeria’s fragile economy. However, Nigeria’s younger population, which makes up a large portion of crypto users, now feels more confused by the government’s actions.

Olumide Adesina, analyst at Quantum Economics, emphasized the need for clarity and support in a statement to unlock the potential of the crypto sector. He pointed out the negative impact of recent government actions, such as the suppression of P2P trading, the arrest of a Binance executive, and allegations of currency manipulation, which have damaged the industry’s image.

Nathaniel Luz, CEO of Flincap, stated that President Tinubu has a unique opportunity to develop Nigeria’s growing crypto sector, similar to how previous leaders reformed the banking sector. Luz criticized the government for the lack of action and called for more efforts to support the industry.

Digital asset regulations released in May 2023

The Nigerian Securities Exchange Commission (SEC) released regulations for digital assets in May 2023, seeking to find a middle ground between a ban and a lack of regulation. In December, the SEC lifted the ban on banks opening accounts for crypto service providers. However, the Central Bank emphasized that global trends necessitated regulation of VASPs, including cryptocurrencies.

In January, the Central Bank released guidelines for banks opening cryptocurrency accounts, although banks are still not allowed to trade or hold virtual assets within their own wallets. These guidelines include strict anti-money laundering (AML) measures, Know Your Customer (KYC) requirements, and transaction limits. Withdrawals from crypto accounts remain prohibited.

May 2024 marked the Nigerian government’s preparations for new regulations banning Peer-to-Peer (P2P) cryptocurrency exchanges involving the national currency, the Nigerian naira.

Developments in the Nigerian crypto industry are viewed with mixed feelings, with hopes for growth and innovation alternating with concerns about the impact of stringent government measures.


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