Nigeria lawmaker Babangida Ibrahim said that the country is set to recognize cryptocurrencies as an investment class in its proposed investments and securities amendment bill, local Punch news reports.
The amendment bill passed the second hearing will allow the Nigerian Securities and Exchange Commission (SEC) to recognize cryptocurrency as capital for investment.
About a year ago, the Central Bank of Nigeria (CBN) ordered financial institutions to close the bank accounts of entities facilitating crypto-related transactions. However, despite the ban, crypto transactions in Nigeria rose by 16%, accounting for over $400 million, by February 2022.
Babangida Ibrahim, the Charman of the Committee on Capital Markets and Institutions in Nigeria’s House of Representatives, said that the digital and borderless nature of crypto makes it difficult for the CBN to ban crypto investments indefinitely.
As a result, the proposed bill seeks to provide a clear framework for crypto-related activities, including commodity exchanges, derivatives, and digital currencies, to operate under regulatory scrutiny.
“In recent times, there are a lot of changes within the capital market, especially with the introduction of digital currencies, commodity exchanges and so many other things that are essential, that need to be captured in the new Act.”
According to the lawmaker, the amendment bill has passed the second hearing and is under review by the Committee on Capital Markets and Institutions. After that, it will be submitted to the House of Representatives for final consideration and approval.
Crypto over CBDC
Nigerians have recently shown that they prefer permissionless cryptocurrencies over government-controlled digital currency.
Nigeria’s central bank digital currency (CBDC), launched in October 2021, has reached only 270,000 users who carried out transactions worth a total of $10 million.
In contrast, interest in crypto in the country has surged significantly as 26% of Nigerians reportedly hold at least one crypto asset in 2022, while 63% view crypto as the future of money. According to Business Insider Africa, Nigeria is Africa’s leading destination for crypto adoption.
Paxful CEO Ray Youssef, in a side chat with CryptoSlate, said that Bitcoin owes its success in Nigeria to the efforts of the youths who defer government restrictions in pursuit of freedom with Bitcoin.