The proposed legislation comes as Nigeria’s eNaira has only achieved a 0.5% adoption rate 12 months after its launch in October 2021.
According to reports, the Nigerian government will soon pass legislation that will recognise the use of Bitcoin and other cryptocurrencies as a means of keeping up with “global practises.”
Following an interview with House of Representatives Committee on Capital Markets chairman Babangida Ibrahim, Nigerian-based masthead Punch Newspapers broke the news on December 18.
According to the report, if the Investments and Securities Act, 2007 (Amendment) Bill is signed into law, the Securities and Exchange Commission will be able to “recognise cryptocurrency and other digital funds as capital for investment.”
Ibrahim emphasised the importance of Nigeria staying current on capital market trends and developments:
“As I stated earlier during the second reading, Nigeria requires an efficient and vibrant capital market. We must be current with global practises in order to do so.”
The report comes nearly 24 months after Nigeria banned crypto activity in February 2021, when the Central Bank of Nigeria (CBN) ordered Nigerian crypto exchanges and service providers to cease operations and mandated banks to close the accounts of any individuals or entities found to be trading.
However, Ibrahim, who also served as President of Nigeria from 1985 to 1993, insists that the law is not a complete reversal of the ban, but rather a secondary review of the CBN’s powers:
“It’s not about lifting the ban; it’s about legality: what’s legal and what’s within the framework of our operations in Nigeria.”
“When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. As a result, they are not subject to the CBN’s jurisdiction. “Because they are not using local accounts, the CBN cannot check them,” he explained.
If the bill passes, the Investments and Securities Act of 2007 in Nigeria will be amended.
The law will outline the regulatory roles of the Central Bank of Nigeria and Nigeria’s Securities Exchange Commission (SEC) on matters relating to digital currencies, in addition to granting legal recognition to Bitcoin and other cryptocurrencies, according to the report.
The law comes at a time when Nigerians have shown little to no interest in the country’s central bank digital currency (CBDC), the eNaira, which has only a 0.5% adoption rate 12 months after its launch in October 2022.
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The Nigerian government’s earlier efforts to crack down on crypto activity were arguably ineffective as well, as adoption increased following the ban in February 2021.
Nigerians only trailed the United States in Bitcoin trading volume from January to August of 2021, and Nigerians Googled “Bitcoin” more than any other country during the same period.
According to a CoinGecko research study conducted in April 2022, Nigerian residents are also the most crypto-curious. The interest is understandable given Nigerians’ ongoing efforts to combat rampant inflation and economic malaise.
Nigeria has also recently entered into preliminary talks with cryptocurrency exchange Binance in September 2022 to establish a crypto-friendly economic zone that will support crypto and blockchain-related businesses in the region.
