Thu. May 23rd, 2024

By Ojukwu Emmanuel Chiadikaobi

 

The Nigerian government is escalating its crackdown on cryptocurrency abuse by announcing plans to remove the naira from all peer-to-peer (P2P) crypto trading platforms. This move, aimed at curbing exchange rate manipulation and dollar racketeering, follows a series of regulatory tightening in the sector.

Emomotimi Agama, the newly appointed Director-General of Nigeria’s Securities and Exchange Commission (SEC), unveiled the plan during a strategy meeting with the country’s blockchain community leaders on Monday. The meeting, facilitated by the Blockchain Industry Coordinating Committee of Nigeria, highlighted the government’s intent to introduce a robust set of rules for the burgeoning crypto market, valued at $57 billion.

The decision comes in the wake of directives issued last week by the Central Bank of Nigeria (CBN), which warned payment service banks and their customers about the risks associated with crypto transactions. Leading local crypto exchanges, including OKX and Bitbarter as well as members of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), had already ceased naira-based services in alignment with earlier government advisories.

In March, SiBAN proposed a collaboration with the government to develop a regulated framework for virtual asset service providers after releasing their Code of Conduct in 2022. This proactive stance by the blockchain association aligns with the SEC’s current regulatory ambitions.

During the meeting, Agama called on the crypto community to assist the SEC in identifying and reporting any entities involved in manipulating the naira. “We ask with all sense of sincerity that those involved in sharp practices cease,” Agama stated. “This nation has a future, and this future is dependent on this community.

Agama emphasized that the SEC is committed to fostering an environment that supports fintech innovation while ensuring economic safeguards. “We must explore innovative solutions to this problem and strike the right balance between encouraging innovation and safeguarding our national economic interests,” he explained.

The DG highlighted that while the SEC is poised to implement an innovative digital asset regulatory regime, the cooperation from the fintech sector is crucial. The proposed regulations aim to sustain Nigeria as a digital asset powerhouse in Africa, with a focus on solutions like real-world asset tokenization that could drive wealth and stimulate the capital market.

The government plans to hold further meetings with stakeholders to refine the new regulatory approach and discuss how to manage P2P trading and other cryptocurrency activities effectively. This dialogue is seen as critical to ensuring that the sector operates transparently and within legal boundaries.

With Nigeria’s crypto transactions growing by nine percent to $56.7 billion over the last year, according to the 2023 Geography of Cryptocurrency Report by Chainalysis, these regulatory adjustments are deemed essential for maintaining the integrity of the financial system and protecting national economic interests.

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