Nigerian stakeholders push for classification of cryptocurrencies as commodities

In response to a recent Illinois court ruling classifying Bitcoin and Ether as commodities, Nigerian stakeholders are calling on the Nigerian Securities and Exchange Commission (SEC) to adopt a similar approach in their regulatory framework.

Growing role of crypto in global finance

The call comes amid the growing role of cryptocurrencies in global finance. Speaking to Cointelegraph, Lucky Uwakwe, Chairman of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), stressed the importance of a clear definition of crypto assets.

“The Nigerian SEC should develop rules that define the asset class of crypto assets or break them down into respective categories and explain to the public how these cryptos qualify to be called securities or commodities,” Uwakwe said.

He pointed out that while the US SEC and the Commodity Futures Trading Commission (CFTC) agree that Bitcoin and Ethereum are commodities, the classification may change due to the distinction between Proof-of-Stake (PoS) and Proof-of-Work (PoW) protocols.

In Nigeria, the Commodity Board has traditionally focused on physical goods such as agricultural produce and cash crops, showing little interest in digital goods so far.

Versatile nature of cryptos once again emphasized

Oladotun Wilfred Akangbe, Chief Marketing Officer at Flincap, an African over-the-counter crypto exchange platform, highlighted the multifaceted nature of cryptocurrencies and the divergent interests of various Nigerian government agencies including the CBN, SEC, FIRS and NSA.

“Fundamental cryptocurrencies like Bitcoin and Ethereum have become highly valuable commodities, in which assets are priced,” Akangbe noted. He emphasized the need for different regulatory approaches for Bitcoin and Ethereum compared to other cryptocurrencies.

Akangbe suggested that the SEC should primarily focus on the use of cryptocurrencies as fundraising vehicles, such as initial coin offerings (ICOs). Another local crypto analyst, Rume Ophi, argued that each cryptocurrency is unique and should be examined individually to determine whether it qualifies as a security or a commodity.

These recommendations are crucial as Nigeria works to establish a comprehensive regulatory framework for digital assets. By treating Bitcoin and Ether as commodities, the Nigerian SEC can bring clarity and stability to the market, encouraging innovation while ensuring regulatory compliance.