Nigeria’s SEC abandons crypto regulations preparation to back central bank’s ban

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Nigeria’s securities regulator has supported the central bank’s ban on crypto by withdrawing its proposed regulatory structure for digital assets.

The Nigerian Securities and Exchange Commission has put in place its proposals to control cryptocurrencies on hold following a recent ban by the central bank banning financial institutions from serving crypto exchanges.

In an e-mail statement, quoted by the Daily Post on Friday, SEC stated:

“For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.”

As previously reported by Cointelegraph, the Commission recognised digital assets in September 2020. At the time, the SEC reported that it was set up to establish a regulatory sandbox for cryptocurrencies as part of efforts to fully regulate the sector.

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For the SEC, its most recent statement is in response to stakeholder enquiries regarding potential policy contradictions between its September announcement and the Central Bank Circular. According to the Commission, the proposal for a regulatory sandbox for non-crypto Fintech companies focused on the stock market will proceed as expected.

Reactions to the central bank’s ban on crypto were apparently divided across the country along ethnic and geopolitical lines, with more progressive political elements arguing against the step. The central bank, for its part, has suggested that a step has been made to kerb the use of virtual currencies by criminal elements in Nigeria.

The plenary session of the Senate on Thursday saw several senators asking for a more nuanced approach by the central bank to the regulation of cryptocurrencies. However, Senator Sani Musa of the Niger East Senatorial District said that Bitcoin had made the naira “nearly useless.”

As part of its deliberations, the Nigerian Senate has agreed to invite the CBN governor to appear before the appropriate committees to discuss potential frameworks for future cryptocurrency regulations in the country.

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