Nigerian SEC to license crypto platforms amid growing market

In June, the Nigerian Securities and Exchange Commission (SEC) updated its regulations to improve oversight of cryptocurrency platforms and exchanges.

This regulatory update includes plans to issue licenses to cryptocurrency exchanges, aiming to enhance the management of digital asset trading.

The amendment process is expected to create a more robust regulatory environment for the cryptocurrency sector.

In a recent interview on Bloomberg Television, SEC Director-General Emomotimi Agama conveyed his enthusiasm for the forthcoming changes.

Agama emphasised the importance of supporting the youth to leverage the benefits of fintech advancements.

He noted that Nigeria’s cryptocurrency market is substantial and continues to grow rapidly.

Nigeria has become one of the fastest-growing crypto economies globally.

Last December, the Central Bank of Nigeria lifted its nearly two-year ban on banks facilitating cryptocurrency transactions.

This decision came after recognising that maintaining strict restrictions on financial institutions was no longer justifiable due to the increasing global demand for cryptocurrencies.

In August 2022, Nigeria was highlighted as the most crypto-obsessed country, based on the volume of Google searches for terms related to cryptocurrency.

Earlier this year, OKX, a prominent cryptocurrency exchange, suspended Naira withdrawals due to regulatory complications.

This suspension followed accusations against Binance, the world's largest crypto exchange, involving currency manipulation and money laundering in Nigeria.

OKX, headquartered in Seychelles, also faced regulatory challenges in other regions, such as India, affecting its operations.

The SEC’s new regulatory framework aims to provide a formal platform for cryptocurrency activities, ensuring comprehensive information gathering.

However, the commission is determined to prevent the use of cryptocurrencies for manipulating the local currency.

These regulatory developments reflect Nigeria's expanding crypto market and the increasing need for structured oversight and management.

These changes signify a significant shift in how Nigeria is approaching cryptocurrency regulation in response to its growing market dynamics.