SEC and Apex Bank Working to Regulate Cryptocurrencies in Nigeria, After the Initial Ban

The Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) collaborate to understand better and regulate cryptocurrencies. This report is coming after the February 5 circular issued by the apex bank directing a financial institution to close account of person or entities involved in cryptocurrency transaction-bitcoin within their system.

In essence, fintech, banks, and other payment institutions are prohibited from facilitating a cryptocurrency exchange for Nigerians. However, early this week at the post-Capital Market Committee (CMC) virtual conference, the Director-General SEC, Lamido Yuguda, said that the Commission was in discussion with the Central Bank Nigeria better understanding and regulation of the crypto assets market. He said that the Commission had suspended the implementation of crypto assets guidelines due to a lack of access to Nigerian bank accounts.

“We are in discussion with CBN for both understanding and better regulating of this market. We will be able to come back to you later to inform you of the outcome of these engagements. But because of the lack of access to commercial bank accounts, we had to suspend our own guidelines of September 2020; the implementation of that circular is suspended until these operators are able to have access to Nigerian bank accounts. Further said remember that nobody operates in the Nigerian capital market if that person does not have access to a Nigerian bank account”

– Yuguda said that SEC remained very supportive of Fintechs and had invested so much in developing a framework to support their operations. Let me say that the SEC remains very supportive of fintechs.

“We have invested so much in developing a framework for supporting fintech in the various areas, and the sector is acting in areas of crowdfunding investment advice and cryptocurrency and the like,” – also he said.

Yuguda said that the market had been disrupted by the apex bank prohibition on access to Nigerian bank accounts by crypto exchange. “In all other areas, nothing has changed, but in the area of crypto assets, you know that with the recent prohibition by the CBN on access to Nigerian bank accounts by exchanges. That market has been disrupted, and the truth of the matter is that SEC had issued guidelines in September 2020 to regulate the crypto market. But for now, all intent and purpose, because these exchanges do not have access to commercial bank accounts in Nigeria, the market, for now, does not exist,” – he said.

According to him, the Commission recognizes the impact of FinTechs on capital market activities. He assured the public that SEC would remain accommodative of this development.

“We shall continue to engage players and support them to operate lawfully. Our aim is to ensure the delivery of safe products and services without stifling innovation,”

He, therefore, encourage Fin Techs companies to approach the Commission for due registration and desists from operating illegally. In essence, this statement by the head of the SEC that the authority is studying the market to regulate the sector is quite a welcoming development for the FinTech industry. Simultaneously the crypto operators such as Binance, Bushahub, Buy coins, and Bitsika, particularly the teeming Nigerian youths that many take crypto trading as their jobs. However, the ban has not deterred many who have alternate to P2P trading.

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