Tokens but not crypto: Nigeria SEC prepares new digital asset rules

Nigeria, one of the world’s most curious nations about cryptocurrencies like Bitcoin (BTC), is preparing new industry regulations for digital asset platforms.

The Nigerian Securities and Exchange Commission (SEC) is considering allowing licensed digital exchanges to list tokens backed by certain assets, Bloomberg reported on May 1.

According to the Nigerian SEC’s head of securities and investment Abdulkadir Abbas, the authority plans to only authorize listings of tokens based on assets like equity, debt or property. Cryptocurrencies like Bitcoin (BTC) and Ether (ETH) will not be among those assets, Abbas reportedly said.

Nigeria’s SEC aims to register fintech firms as digital sub-brokers, crowdfunding intermediaries, fund managers and tokenized coins issuers. The authority will not register crypto exchanges until the central bank provides clear regulations for the crypto market.

Abbas noted that license applicants would undergo a year of “regulatory incubation,” allowing the SEC to study their operations and render their services in the country. He added:

“By the 10th month, we should be able to make a determination whether to register the firm, extend the incubation period or even ask the firm to stop operation.”

As previously reported, the Central Bank of Nigeria banned local banks from providing services to cryptocurrency-related platforms in early 2021. On the ban, the regulator cited high risks associated with trading cryptocurrencies like Bitcoin. The central bank also promised to impose strict penalties for any lender or financial institution failing to comply with the directive.

Related: MetaMask enables direct crypto purchases in Nigeria

Despite the ban, Nigeria has emerged as one of the most active countries in terms of adoption and curiosity about Bitcoin and other cryptocurrencies.

According to data from Google Trends, Nigeria ranks second by search interest for the keyword “Bitcoin,” behind El Salvador, which adopted Bitcoin as legal tender in 2021. Other jurisdictions in the top-five crypto-curious countries list include Slovenia, Netherlands and Switzerland.

Interest in crypto by country. Source: Google Trends

According to Chainalysis’ crypto adoption index, Nigeria was also among the top 20 countries in terms of crypto adoption in 2022.

While prohibiting cryptocurrencies, the Central Bank of Nigeria has been actively promoting its central bank digital currency known as the eNaira. Following a sluggish start, the eNaira reportedly saw increased adoption due to national fiat reserves facing severe shortages.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

All Dutch and English crypto news!

Samourai Wallet co-founder pleads not guilty, released on $1M bond

The terms of Keonne Rodriguez’s bail prevent him from engaging in “any cryptocurrency transactions, directly or indirectly,” without prior approval from the court. News Own this piece...

Solana illustrates the dark side of monolithic blockchains

Modular blockchains might lead to a poor user experience, but — unlike Solana — they remain functional even during periods of high demand. Opinion Own this piece of...

Terraform proposes $1M penalty for SEC case, no relief or disgorgement

Lawyers for Terraform claimed that seeking disgorgement from the platform would involve the Luna Foundation Guard, a “non-party” in the SEC’s civil case. News Own this piece...

Crypto investment funds see $435M outflow as bull market stalls amid rising inflation concerns

Concerns over rising inflation and flat spot Bitcoin ETF inflows could be factors in the $435 million outflow from crypto investment funds last week. Markets News Own...

Beste exchanges

Koop je crypto bij Bitvavo