Is Nigeria about to ban crypto?

In Feb 2021, the Securities and Exchange Commission (SEC) of Nigeria announced the suspension of every type of cryptocurrency in Nigeria. Additionally, the commission warned the public about any crypto-related activities and funding platforms. However, seeing the vast majority of people moving towards crypto, the commission has to back up its plan.

In May 2022, the commission shared guidelines about the custody and trading of digital assets in Nigeria. Most crypto investors and experts thought that this could be a step towards the regulation of cryptocurrencies and trading in the country. However, on Sunday the commission was again in the news with something else on its shoulders.

Is crypto part of digital assets in Nigeria?

According to the Security and Exchange Commission, cryptocurrencies are not part of digital assets in the country which is why the guidelines of May still hold in the country. Will this ban remain forever? General Director of the Commission, Lamido Yuguda, said no. According to him, “at least not until regulators there can agree to standards that keep investors safe”

On Friday, the Director General said that all the crypto holders should avoid trading crypto because “crypto exchanges still have no access to the banking platform required to drive their trades in Nigeria”.

What about other digital assets?

The commission is aware that the world is fast moving towards digital assets and you cannot hold them back for too long, which is why they are promoting the investment in “sensible digital assets,”. The commission reported that “The commission is in the business of protecting investors, not in the business of speculation.”

According to the commission, the volatility and security of the crypto are real concerns for them. That is why the report says that “The commission may reject any application for registration of digital assets if, in its opinion, the proposed activity infringes public policy, is injurious to investors or violates any of the laws, rules, and regulations implemented by the commission,”

Keeping in mind the volatility and security, any assets that are traded in Nigeria will need to have “the joint approach of different regulators.”

End of crypto in Nigeria?

It is near to impossible to ban the overall transactions of crypto in Nigeria it is because the country stands at 11th position in the top 30 countries in Chainalysis’ Global Crypto Adoption Index. There are several reasons why Nigerian people and investors see that crypto is the ultimate solution for them.

• It is a speculative investment that can make them wealthy shortly
• Using crypto as a hedge against inflation
• It is a way to make an international payment to those that do not accept the Nigerian currency, Naira.
•  Additionally, people make payments to avoid several intermediaries along the way and make faster payments.

Taking the above things into consideration, it will be very hard for the Nigerian government or the Security and Exchange Commission of Nigeria to ban crypto forever. This is not only applicable to Nigeria but to any other third-world country in the world. They see crypto trading as the ultimate solution for their problems in payment to international investors and the complication in the process.

Final thoughts

Many may think of this as the final verdict of the Security and Exchange Commission. Still, sooner and later, the commission will rethink and accept the fact that no matter what, crypto trading is the future of the country. However, the commission is worried about the protection and security of the investors’ payment, ban on crypto trading is not a solution. There can be regulations in order to protect investors from any fraud.