One year into President Bola Tinubu’s tenure, Nigeria’s crypto industry is grappling with confusion and concern. While Tinubu’s campaign promised to legalize cryptocurrency and blockchain technology to bolster Nigeria’s fragile economy, stakeholders claim that recent government actions have left the industry without clear direction.
Young Population’s Response
Nigeria’s young population, a significant segment of the crypto market, feels increasingly bewildered by the administration’s approach to the crypto sector. Olumide Adesina, an analyst at Quantum Economics, emphasized the need for clarity and support to unlock the sector’s potential. He pointed out that recent government actions, including a crackdown on peer-to-peer (P2P) trading, the arrest of a Binance executive, and accusations of currency manipulation by state officials, have cast the industry in a negative light.
Industry Experts’ Opinions
Nathaniel Luz, CEO of Flincap, a liquidity platform for crypto exchanges, believes that President Tinubu has a unique opportunity to shape Nigeria’s emerging crypto sector, akin to how past leaders shaped the banking industry. Luz asserts that the crypto industry is maturing, and more proactive measures from the administration are necessary to support this growth.
Crypto Policies Over the Past Year
In May 2023, the Nigerian Securities Exchange Commission (SEC) published regulations for digital assets, suggesting an attempt to find a balance between a total ban and a lack of regulation. By December, the SEC had lifted its ban on banks operating accounts for crypto service providers. The Central Bank also indicated the need to regulate Virtual Asset Service Providers (VASPs), including cryptocurrencies.
Also Read: SEC Issues Warning on Five Common Crypto Scams
In January 2024, the Central Bank released initial guidelines for banks opening cryptocurrency accounts, though banks are still prohibited from trading or holding virtual assets within their own portfolios. These guidelines included stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) measures, along with prudent transaction limits and a ban on cash withdrawals from crypto accounts.
Recent Government Actions
In May 2024, the Nigerian government began preparing new regulations to ban P2P cryptocurrency exchanges using the national currency, the Nigerian naira. This move has raised further concerns about the administration’s stance on crypto and its commitment to fostering innovation in the sector.
