Cryptocurrency Regulation: SEC Nigeria Joins the Trail to Set Standards for Crypto ActivitiesSeptember 16, 2020
The Nigerian Securities and Exchange Commission (SEC) on Monday, 14th September made a statement on its stand as it starts regulating crypto-assets offering, trading, advisory, etc. This is an update of the government’s regulation as it was totally against cryptocurrency and advised citizens to stay away from dealing with anything related to it in the past. This is seen in a tweet from the official Economic Financial Crime Commission (EFCC) twitter handle from January 27, 2017:
“Be Warned! Virtual Currencies are NOT Legal Tenders. The #EFCC Advises against Crypto Currencies and Any Associated Dealings.”
But since then, a lot of Nigerians have ventured in cryptocurrency and blockchain. From recent Coinmarketcap metrics, Nigeria saw a 210% increase in the number of crypto users between ages 18 to 24.
SEC Nigeria stated that its regulation is not to hinder technology but to create standards that encourage ethical practices:
“The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.”
The regulation will cover individuals who operate or perform activities relating to the “reception, transmission and execution of orders on behalf of other persons, dealers on own account, portfolio management, investment advice, custodian or nominee services.” These individuals have to be registered with the commission. Furthermore, Issuers and sponsors of digital assets (crypto startups) also need to have themselves registered. An ultimatum of three months is given to existing crypto ventures to register:
“Existing digital assets offerings prior to the implementation of the Regulatory Guidelines will have three (3) months to either submit the initial assessment filing or documents for registration proper, as the case may be.”
Nigeria has taken a step forward in the adoption of cryptocurrencies. China has led the way as the People’s Bank of China may be the first to offer a Central Bank Digital Currency (CBDC). The US State Bank regulators have recently agreed to streamline regulations for large payments and cryptocurrency firms. According to a recent report from Reuters:
“The Conference of State Bank Supervisors (CSBS) will on Tuesday unveil the new regulatory regime for money services businesses, which will undergo a single exam by a joint group of state regulators that oversee licensing, instead of dozens of individual state exams.”
As the world governments begin to tend towards the regulation of cryptocurrencies, the Indian Government is taking a step backward as it is planning to pass a bill to ban cryptocurrency trading. According to a Bloomberg report:
“India plans to introduce a new law banning trade in cryptocurrencies, placing it out of step with other Asian economies which have chosen to regulate the fledgling market.”
Which Government do you think will make the next regulation for or against Cryptocurrency?