Nigerian Stakeholders Advocate Commodity Classification for BTC and ETH

Nigerian stakeholders are calling on the Nigerian Securities and Exchange Commission (SEC) to consider bitcoin and ether as commodities. This push for clarity comes as a recent court decision in Illinois classified these cryptocurrencies in a similar manner.

During an interview, Lucky Uwakwe, chairman of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), stated the importance of clear class definition of crypto assets. He believes that providing explicit guidelines will help developers ensure compliance.

Need for Clear Guidelines

According to Uwakwe, it is crucial for the Nigerian SEC to establish rules that define the asset class of crypto assets. He states that the regulators should categorize various types of crypto and explain how each qualifies as a security or commodity.

The chairman pointed out that while the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have agreed on classifying Bitcoin and Ether as commodities, the distinction between proof-of-stake (PoS) and proof-of-work (PoW) protocols could influence the classification of specific crypto assets.

This recommendation from stakeholders is important for Nigeria to establish a comprehensive regulatory framework for digital assets. Notably, despite completing one year in presidency change, the crypto regulation in the country seems hazy.

The Commodity Board in the country has historically focused on physical commodities like cash crops and agricultural products. They have shown a limited interest in digital commodities and therefore, this shift in perspective is seen as necessary to keep up with the evolving economy.

BTC and ETH Are Different: Nigerian Analysts

Oladotun Wilfred Akangbe, chief marketing officer at Flincap, an African platform for over-the-counter crypto exchanges, highlighted the varied interest from multiple Nigerian governmental bodies. This includes the Central Bank of Nigeria (CBN), SEC, Federal Inland Revenue Service (FIRS), and National Security Agency (NSA). Akangbe suggests that Bitcoin and Ether need different regulatory approaches compared to other cryptocurrencies. He states:

“Foundational cryptocurrencies such as Bitcoin and Ethereum have become very valuable commodities such that assets are priced in them.”

Akangbe proposed that the SEC should focus on cryptocurrencies used as fundraising instruments, such as initial coin offerings (ICOs).

Popular Nigerian analyst Rume Ophi also believes in the individual scrutiny of each cryptocurrency to determine whether it qualifies as a security or a commodity. He states that each crypto asset is unique and should be analyzed on its own merits.