Nigerian SEC to Set Up a Special Division for Studying Crypto Investments

The Nigerian Securities and Exchange Commission, the country’s financial market regulator, has set up a fintech division to study all crypto-related investments and products to assess the feasibility of establishing a regulatory framework. According to Lamido Yuguda, the Director of the SEC, his bureau wants to come up with proper rulings to ‘protect’ consumers in the best way possible.

“We are looking at this market closely to see how we can bring out regulations that will help investors protect their investment in Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term,” Yuguda told Reuters, although he did not provide a deadline for deploying regulations in the domestic crypto markets. However, the Head of the SEC clarified that the watchdog would proceed with regulatory frameworks once the Nigerian banking system allows Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

In the same interview, Yuguda stated that the SEC had been in talks with the Central Bank of Nigeria (CBN) as they are preparing the launch of the forthcoming CBDC, e-Naira. Last month, the CBN drafted a series of guidelines addressing domestic banks about the Nigerian central bank digital currency project. The document is aimed to detail the design and the operational structure of the coin, which is reportedly intended to be legal tender in Nigeria.

Reuters noted that the Nigerian financial watchdog looks forward to working with domestic fintech firms to prevent capital flight.

Nigeria and Cryptos

Early this year, the Nigerian SEC had a tough stance against cryptocurrencies after suspending its plans to regulate the digital assets following the central bank’s circular in suspending bank accounts for crypto companies.

Nigeria is one of the top countries in Africa with crypto penetration. According to market data compiled by Coin Dance, 60,215 Bitcoins were traded in Nigeria in the last five years, which is behind the US. In addition, the Nigerian SEC recognized cryptocurrencies in September 2020 and planned to create a regulatory sandbox for digital currencies.