Nigeria’s Regulator Publishes New Rules For Digital Assets

Nigeria’s Securities and Exchange Commission (SEC) has published 54 pages of regulations for digital assets, as an attempt to find middle ground between total ban and unregulated use of crypto assets.

In February 2021, the Central Bank of Nigeria (CBN) issued a letter to regulated financial institutions in the country to “immediately” close accounts connected to cryptocurrency-related activities.

Still, Nigeria’s young, tech-savvy population has eagerly adopted cryptocurrencies, often using peer-to-peer trading offered by crypto exchanges to avoid the ban.

The 54-page document lays out registration requirements for digital assets offerings and custodians, and classifies the assets as securities regulated by the SEC.

According to the market regulator, no digital assets exchange would be allowed to facilitate trading of assets unless it had received a “no objection” ruling from the commission.

A digital assets exchange will be required to pay 30 million naira ($72,289) as a registration fee, among other fees.

In October, Nigeria launched a central bank digital currency (CBDC), the eNaira, in the hope of expanding access to banking. CBDCs are digital versions of the central bank issued fiat currencies. They are backed and controlled by the central bank.

The regulations may “act as the precursor for a surprise move from the central bank to reverse its approach, providing critical foundations for mass crypto adoption across the country,” said Owen Odia, country manager for Nigeria at cryptocurrency exchange Luno.