Nigeria’s SEC Ready to License Cryptocurrency Providers

The Nigerian Securities Exchange Commission (SEC) is set to license cryptocurrency providers, a pivotal move indicating the country’s growing acceptance and regulation of digital assets.

This decision reflects an effort to harness the burgeoning opportunities in the cryptocurrency sector while ensuring robust investor protection.

The shift comes on the heels of significant regulatory changes. In a recent interview with Bloomberg, Emomotimi Agama, the SEC’s Director-General and a noted advocate for fintech and cryptocurrencies, announced the imminent issuance of the first licenses for digital services and tokenized assets.

“This is going to happen sooner than you think,” he stated.

This development comes after the Central Bank of Nigeria’s (CBN) decision in December 2023 to lift a longstanding ban on cryptocurrency transactions.

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This marked a significant policy shift, acknowledging the potential and inevitability of integrating digital assets into the Nigerian financial landscape.

Previously, the federal government imposed a crackdown on Binance, one of the largest global crypto exchanges, citing regulatory breaches, highlighting the need for a structured and compliant framework for cryptocurrency operations.

Further tightening the regulatory framework, in May, the SEC announced its intent to delist the naira from all peer-to-peer (P2P) platforms, including Binance. This move aimed to curb market manipulation and stabilise the economic environment affected by cryptocurrency transactions.

The potential economic impact of these regulatory efforts is substantial. Agama revealed that Nigeria’s cryptocurrency market is already valued at over $400 million.

Projections suggest that by 2028, the volume of crypto transactions could soar to $52.5 million, marking a 12.66 percent increase from 2024. These figures not only illustrate the current market dynamics but also highlight the growth potential that proper regulatory oversight could unlock.

By licensing cryptocurrency providers, the SEC aims to create a safer and more stable environment for investors and users.

This approach not only aligns with global trends of regulating digital assets to prevent fraud and ensure market integrity but also positions Nigeria as a forward-thinking participant in the global digital economy.