One Year After Presidency Change, Crypto Regulation Still Unclear In Nigeria

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President of Nigeria, Bola Ahmed Tinubu who recently celebrated one year in office has left Nigerian crypto enthusiasts with a blend of optimism and worry concerning the crypto regulation in the country. 

During the Tinubu campaign, he promised to legalize crypto and blockchain technology in Nigeria’s banking and finance realm as a move to bolster Nigeria’s delicate economy. However, Tinubu’s administration has left the sector in limbo with unclear actions and policies over the past year. 

What has become of Crypto in Nigeria during the Tinubu regime 

Ever since the administration of President Tinubu started over a year ago, he had a special chance to influence Nigeria’s developing crypto field, compared to how past leaders shaped the banking sector.

Nevertheless, recent unfavorable developments in the crypto industry have cast a shadow on the nation. Actions such as cracking down of the peer-to-peer (P2P) trading have contributed to this negative light. 

The controversies surrounding the Binance executive and the accusations of currency manipulation by government officials have also led to a temporary setback.

Nathaniel Luz, Flincap’s CEO, noted the evolving crypto sector and Tinubu’s pivotal role in shaping its future. Luz criticized the current administration’s insufficient efforts and called for more proactive measures.

Positive Achievements of Crypto in Nigeria

Nigeria’s crypto-savvy community and vast digital market, rich with opportunities, has drawn the attention of many protocols despite obscure crypto regulation. MetaMask, a cryptocurrency wallet and decentralized application makes it easier and faster for consumers to purchase crypto assets. It is one of the applications being used by the crypto-savvy community in Nigeria.

With such high levels of awareness and enthusiasm, it is no surprise that the most populous country in Africa made history with Africa’s first-ever multilingual large language (LLM) model launched early this year. 

In 2021, the Central Bank of Nigeria (CBN) reportedly directed the closure of accounts of crypto traders following the introduction of E-naira, Nigeria’s digital currency. 

However, despite this significant obstacle, a 2023 report from Web3 software company Consensys indicates a notable increase in crypto awareness and adoption in the country.

Crypto Regulation Maze in Nigeria 

The irregularities in crypto regulations in Nigeria stem from the lack of clear and consistent guidelines. 

In January, the Central Bank issued preliminary rules for banks to open cryptocurrency accounts; however, banks are still prohibited from trading or holding virtual assets in their own portfolios.

In 2023, The Nigerian Securities and Exchange Commission (SEC) reportedly permitted tokenized coin offerings on licensed digital asset exchanges, excluding cryptocurrencies, and subjected the digital platforms to a regulatory incubation.

This inconsistent enforcement of regulations has raised worries about equitable treatment and adherence to compliance standards.

Many analysts including Olumide Adesina, an analyst at Quantum Economics, have emphasized the importance of clear guidance and advocated for a thorough review of the SEC guidelines for local crypto exchanges.

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