Nigeria Set to Pass Bill Recognizing Bitcoin and Cryptocurrencies

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The Nigerian government will soon pass a law that will recognize the use of Bitcoin (BTC) and other cryptocurrencies as a means of keeping abreast of global practices.

The news was reported by the Nigerian Punch Newspapers on December 18 following an interview with Chairman of the House of Representatives Capital Markets Committee, Babangida Ibrahim.

The report states that if the Investments and Securities (Amendment) Bill 2007 is enacted, it would allow the local Securities and Exchange Commission to recognize cryptocurrency and other digital funds as investment capital. .

Ibrahim stressed the need for Nigeria to keep abreast of trends and developments in capital markets:

As I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. To do this, we must be up to date [with] global practices.

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 person or entity found to be engaging in commercial activities.

But Ibrahim, who also served as Nigeria’s president between 1985 and 1993, insists the passage of the law is not a 180-degree turn on the ban, but rather a side-examination of what falls under the powers of the CBN:

It is not a matter [the] lifting the ban, we look at legality: what is legal and what is within the scope of our operations in Nigeria.

When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors were not even using local accounts. So they do not fall under the jurisdiction of the CBN. Because they don’t use local accounts, there’s no way for the CBN to verify them, he explained.

If the law is passed, amendments will be made to the Nigerian Investments and Securities Act 2007.

In addition to granting legal recognition to Bitcoin and other cryptocurrencies, the law will outline the regulatory roles of the Central Bank of Nigeria and the Nigerias Securities Exchange Commission (SEC) on matters relating to currencies. digital, according to the report.

The law also comes as Nigerians have also shown little to no interest in Nigeria’s central bank (CBDC) digital currency, eNaira, which has only achieved an adoption rate of 0. 5% 12 months after its launch in October 2022.

Related: Emerging Markets Lead Global Adoption Index: Chainalysis Report

Efforts by the Nigerian government to clamp down on crypto activity earlier were arguably also ineffective, as adoption continued to surge after the February 2021 ban.

From January to August 2021, Nigerians trailed only the United States in Bitcoin trading volume, and during the same period, Nigerians googled Bitcoin more than any other country.

Nigerian residents were also found to be the most crypto-curious nation according to an April 2022 research study conducted by CoinGecko. Curiosity comes as no surprise as Nigerians continue to seek to battle runaway inflation and economic malaise.

Nigeria has also recently entered into preliminary discussions with cryptocurrency exchange Binance in September 2022 to develop a crypto-enabled economic zone that will aim to provide support to crypto and blockchain-related businesses in the region.

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