The head of Nigeria’s Securities and Exchange Commission (SEC) announced on Thursday that the country’s securities regulator has established a fintech division to research crypto investments and products in order to develop laws.
In a virtual interview with Reuters in Abuja, SEC Director-General Lamido Yuguda said, “We are looking at this industry attentively to see how we can bring up legislation that will enable investors to secure their investment in blockchain.”
He did not give a timeline for implementing laws but did say that if crypto is accepted into the Nigerian banking system, the SEC will step in with regulations. The Securities and Exchange Commission (SEC) has attempted to regulate cryptocurrency on the basis that it is a form of securities transaction.
Nigeria is one of the largest venues for cryptocurrency trading, but the central bank banned lenders from transacting or supporting cryptocurrency transactions in February. Bitcoin, the first and largest cryptocurrency, has grown in popularity in Nigeria in recent years, owing to payments from small businesses and a weakening naira, which makes it difficult to obtain the US dollars needed to import products and services.
According to Yuguda, the commission has been in discussions with the central bank, which resulted in the establishment of the country’s digital currency, e-naira. To combat capital flight, the commission is looking to collaborate with fintech businesses to increase the marketing of local assets. Six firms’ accounts were frozen by the central bank earlier this month for allegedly obtaining funds through illicit foreign exchange operators in order to purchase international equities and cryptocurrencies.
The SEC is attempting to increase savings through investment programs, which now have over 4 trillion nairas ($9.7 billion) under administration by public and private fund managers. According to Yuguda, the regulator has requested that private managers set up custody procedures to protect investors.
A crypto asset is not issued or guaranteed by any jurisdiction, according to the head of Nigeria’s securities regulatory commission, and fulfills the above functions only by agreement among the crypto asset’s users. It differs from fiat currency and e-money in that it is not issued or guaranteed by any jurisdiction.
The SEC is looking into ways to collaborate with fintech companies to improve the marketing of domestic securities and prevent capital flight, as well as ways to increase savings through investment schemes, which currently have over N4 trillion ($9.7 billion) under management between private and public fund managers.
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