Nigeria seeks cryptocurrency clarity after one year in Tinubu term
There is a mixture of hope and concern in Nigeria’s cryptocurrency industry. Stakeholders in the sector say President Bola Tinubu’s government actions and policies have failed to bring clarity to the industry over the past year.
Nigerian President Tinubu promised in his campaign manifesto to legalize cryptocurrency and blockchain technology for the country’s banking and financial sector. This decision was approved because of its potential to strengthen Nigeria’s weak economy.
Tinubu’s thoughts on the past year
However, Nigeria’s young population is now even more dismayed by the government’s recent actions against the country’s cryptocurrency industry. Olumide Adesina, an analyst at Quantum Economics, said in a statement shared with Cointelegraph that the sector needs clarity and support to unlock its potential.
Adesina emphasized that recent actions, including the crackdown on peer-to-peer trading, the arrest of Binance executives, and allegations of currency manipulation by government officials, have temporarily cast the industry in a negative light. This is despite strong interest from the country’s young and dynamic population.
Nathaniel Luz, CEO of Flincap, a cryptocurrency exchange liquidity platform, emphasized that President Tinubu has a unique opportunity to shape Nigeria’s emerging cryptocurrency sector, just as previous leaders did in the banking industry.
Luz said the cryptocurrency industry is maturing and it is up to President Tinubu to decide how to proceed. Luz argued that the administration has not done enough and that more needs to be done.
Cryptocurrency policy last year
In May 2023, Nigeria’s Securities and Exchange Commission (SEC) announced regulations for digital assets, suggesting that the authority is seeking a middle ground between prohibition and lack of regulation.
In December, Nigeria’s SEC lifted a ban on cryptocurrency service providers operating bank accounts, and the central bank said there was a need to regulate the activities of VASPs, including cryptocurrencies and assets, in line with global trends.
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Last January, the central bank issued initial guidance on banks opening cryptocurrency accounts, but the ability of banks to trade or hold virtual assets within their own portfolios is still prohibited.
The guidelines include strict anti-money laundering (AML), know your customer (KYC) and other measures. Additionally, banks must set “prudent” transaction limits and not allow cash withdrawals from cryptocurrency accounts.
In May 2024, the Nigerian government began preparing to introduce new regulations banning peer-to-peer cryptocurrency exchanges using the national currency, the Nigerian Naira.
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