Nigeria Set To Pass Bill Recognizing Bitcoin And Cryptocurrencies

According to reports, the Nigerian government will soon adopt a law to recognize Bitcoin and other cryptocurrencies to stay current with “global practices.” After an interview with Babangida Ibrahim, chairman of the House of Representatives Committee on Capital Markets, Punch Newspapers in Nigeria reported the news on December 18th.

According to the report, if the Investments and Securities Act, 2007 (Amendment) Bill is passed, it will allow the local Securities and Exchange Commission “to recognize cryptocurrency and other digital assets as capital for investment.”

Ibrahim stressed that Nigeria must keep up with the latest developments in capital market markets: “Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices.”

This report came nearly 24 months after Nigeria banned crypto activity in February 2021. The Central Bank of Nigeria (CBN) ordered Nigerian cryptocurrency exchanges and service providers to cease their activities and directed banks to close down any accounts of individuals or entities involved in trading.

Ibrahim, who was also Nigeria’s President from 1985 to 1993, insists that the law’s passage isn’t a 180-degree turn on the ban. It’s a secondary review of the CBN’s powers: “It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is 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. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them,” he explained.

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

The report stated that in addition to legalizing Bitcoin and other cryptocurrencies, the law would also outline the regulatory roles of Nigeria’s Securities Exchange Commission and the Central Bank of Nigeria (SEC) in matters related to digital currencies.

This law comes as Nigerians also have shown little or no interest in Nigeria’s digital currency (CBDC), eNaira. It only received a 0.5% adoption rate 12 months after its launch in October 2022.

The Nigerian government failed to take action against crypto activity earlier in its history. However, adoption continued to rise after the ban in February 2021.

Between January and August 2021, Nigerians trailed only the United States in Bitcoin trading volume. Over the same time, Nigerians googled “Bitcoin” more than any other country.

In April, CoinGecko conducted a 2022 research study. This curiosity is not surprising as Nigerians continue looking to combat rampant inflation, economic malaise, and other problems.

Nigeria has also entered into discussions in an early stage with Binance, a cryptocurrency exchange, in September 2022 to create a crypto-friendly economic area that will support crypto-related businesses.