Nigeria's financial regulator is preparing to license cryptocurrency exchanges. The country's Securities and Exchange Commission (SEC), headquartered in Abuja, is set to unveil its inaugural licenses for digital and tokenized assets this month, Bloomberg reported.

Regulating Crypto

According to the regulator, this move reflects a broader global trend of regulators increasingly seeking to bring crypto markets under formal oversight. Emomotimi Agama, the SEC's Director-General, highlighted the urgency and potential of this regulatory change.

“Being a crypto enthusiast and fintech enthusiast, I can tell you without doubt that this is going to happen sooner than you think,” Agama stated during a Bloomberg Television interview. He emphasized the need to support the country's youth in tapping into fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term opportunities, citing the growing market size.

Nigeria's decision aligns with regulatory actions in other regions. The European Union, South Africa, and Botswana have implemented frameworks to manage digital assets, aiming to stabilize markets and protect investors. These steps come in the wake of a tumultuous period in 2022, marked by significant market crashes and scandals that prompted calls for stricter oversight.

Nigeria’s top finance regulator plans to license crypto exchanges as adoption surges https://t.co/0OulDkPNZx

— Bloomberg Crypto (@crypto) August 20, 2024

In contrast, Nigeria has faced challenges, including a previous ban on banks facilitating crypto transactions. Authorities were concerned about currency manipulation impacting the naira, which has sharply depreciated against the dollar.

The SEC's forthcoming licensing regime aims to address these issues by providing a structured approach to crypto market operations. In addition to the licensing plan, Nigeria is preparing to introduce a new bill by September that will outline tax regulations for cryptocurrency transactions.

Upcoming Legislation and Ongoing Legal Actions

This development is expected to further integrate digital assets into the country's financial system. Meanwhile, legal actions are ongoing against crypto exchange Binance, with allegations of tax evasion and money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term leading to the imprisonment of one executive.

As Nigeria moves forward with its crypto licensing initiative, the financial sector anticipates a more regulated environment that balances growth with investor protection.

Even as Nigeria prepared to restore sanity in the crypto assets space, some exchanges have suspended operations. Recently, OKX discontinued its services in the region due to changes in local regulations. This step followed months of gradual service reduction, culminating in a complete exit. The crypto exchange specified that all services in the country will cease by August 16.