The Nigerian Securities and Exchange Commission (SEC), led by Emomotimi Agama, has announced plans to issue licenses to cryptocurrency exchanges in the country, signaling a significant shift in the regulatory approach to digital assets.
This move is part of a broader effort to support the growing adoption of cryptocurrencies in Nigeria.
In June 2024, the SEC introduced a new program designed to expedite the registration process for Virtual Asset Service Providers (VASPs). Additionally, the SEC updated its regulations on Digital Asset Issuance, platforms, Exchanges, and Custody.
During an interview with Bloomberg, Agama, the SEC’s director-general, revealed that the commission is preparing to issue its first licenses for digital services and tokenized assets within the month.
Agama emphasised the importance of supporting Nigeria’s youth in harnessing the benefits of financial technology, noting the significant and expanding market size.
“We must support the youths of this country to be able to achieve the benefit that is accruable in fintech. The market size is huge and it is growing,” Agama said.
He also stressed the need for a formal platform where cryptocurrency activities can be properly monitored and regulated, while also expressing concerns about the potential misuse of cryptocurrencies to manipulate the national currency.
This development follows a series of significant regulatory actions in Nigeria’s cryptocurrency space. In December 2023, the Central Bank of Nigeria (CBN) lifted its ban on cryptocurrency transactions.
However, months later, the federal government took action against Binance, a major crypto exchange, for “regulatory breaches.” Subsequently, the SEC announced plans to delist the naira from all peer-to-peer (P2P) platforms, including Binance, to prevent manipulation in the cryptocurrency market.
Agama highlighted that Nigeria’s cryptocurrency market is valued at over $400 million, with expectations that the volume of crypto transactions could reach $52.5 million by 2028, reflecting a 12.66 percent increase from 2024 to 2028.
Nigeria has been recognized as one of the leading countries in crypto adoption, ranking second in terms of usage last year and the most crypto-active country by Google search volume in August 2022.
In response to regulatory pressure, major crypto exchanges like OKX and Binance have delisted naira P2P trading, and naira withdrawals have been suspended on their platforms due to accusations of currency manipulation and money laundering by Nigerian authorities.
The SEC’s decision to issue licenses marks a reversal in its previous stance, which had involved a crackdown on crypto entities.
Agama explained that the goal is to establish a transparent and regulated environment for cryptocurrency activities, free from the influence of bad actors. “The SEC wants to provide a platform where people can formally do these things, and we are able to get all of the information that we need,” he reiterated.
Agama also made it clear that while the SEC is supportive of the growth in fintech and cryptocurrencies, it will not tolerate the use of digital assets for currency manipulation.
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