The Nigerian Securities and Exchange Commission (SEC), led by Emomotimi Agama, has announced plans to begin issuing licenses to crypto exchanges in the country, a move aimed at supporting the rapidly expanding adoption of digital assets.
In June, the Nigerian SEC introduced a new program designed to expedite the registration process for Virtual Assets Service Providers (VASPs). This initiative was followed by amendments to the SEC’s regulations on Digital Assets Issuance, offering platforms, exchanges, and custody services.
In a recent interview with Bloomberg, SEC Chief Emomotimi Agama reiterated his commitment to establishing a regulatory framework for cryptocurrency in Nigeria, particularly in light of the significant involvement of young Nigerians in the sector.
“As a crypto and fintech enthusiast, I can assure you that this is going to happen sooner than you think,” Agama stated. “We must support the youth of this country to harness the benefits available in fintech.” He added.
Nigeria’s Rapidly Expanding Crypto Economy
Nigeria is recognized as one of the fastest-growing crypto economies globally, with a significant demand for digital assets. This surge in interest prompted the Central Bank of Nigeria to lift its two-year ban on banks facilitating cryptocurrency transactions. The central bank acknowledged that maintaining stringent restrictions in such a rapidly expanding sector was no longer tenable.
Last year, Nigeria ranked as the second-largest economy in terms of crypto adoption. In August 2022, the country was also named the most “crypto-crazy” nation based on Google search volume.
Challenges for Naira-Based Crypto Transactions
Earlier this year, major crypto exchanges like OKX and Binance halted Naira peer-to-peer (P2P) trading and Naira withdrawals on their platforms, following accusations from Nigerian authorities of currency manipulation and money laundering.
The SEC’s recent decision to issue licenses to crypto exchanges represents a significant shift in policy following these earlier crackdowns. Agama emphasized in his Bloomberg interview that the SEC aims to create a transparent platform for crypto transactions that is free from bad actors.
“The SEC wants to establish a formal platform where these transactions can take place, ensuring we have all the necessary information,” Agama explained. “What we will not tolerate is the use of cryptocurrency to manipulate our currency.”
Ongoing Disputes with Crypto Exchanges
It’s important to note that Nigerian authorities remain in a dispute with Binance over allegations of money laundering and tax evasion. As of the time of this report, Binance executive Tigran Gambaryan is still detained by Nigerian authorities.
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