NAIROBI (CoinChapter.com)— Nigeria’s SEC has decided to license crypto exchanges to regulate the region’s fast-growing crypto market. The commission plans to issue these licenses in response to the nation’s increasing adoption of digital assets.
According to Bloomberg, the SEC will begin issuing licenses as early as this month. In this context, Director-General Emomotimi Agama emphasized the need for a formal platform to facilitate crypto transactions.
Consequently, the platform will allow the SEC to gather essential data while promoting the market’s benefits, especially for Nigeria’s youth.
Nigeria’s Troubled Relationship with Cryptocurrency
In 2021, the Central Bank of Nigeria (CBN) prohibited banks from processing crypto transactions due to concerns about the naira’s stability. In response, the Nigerian crypto community shifted to peer-to-peer (P2P) transactions to continue trading.
Despite ongoing crackdowns, including the case against Binance in Feb. 2024, where executives were accused of contributing to the naira’s depreciation, the adoption of digital assets has persisted.
The Nigerian government’s tough stance has not deterred the nation’s crypto enthusiasts, who remain resilient despite regulatory obstacles.
The SEC’s decision to license exchanges may signal a turning point, potentially leading to a more structured and supportive environment for the Nigerian crypto market.
Potential Impact of New Regulations on Nigeria’s Crypto Market
The SEC’s move to license crypto exchanges represents a significant step towards standardizing Nigeria’s digital asset market. The commission aims to create a safer, more transparent environment for investors and traders by establishing a regulated framework.
Chainalysis said Nigeria’s crypto transaction volume increased by 9% to $56.7 billion in June 2023. However, Director-General Agama noted that this figure likely underrepresents the market’s true scale, as many transactions go unreported.
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