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Nigeria has the world’s second largest peer-to-peer digital currency market and is the African market leader. However, a ban on digital currency-related banking services imposed by the Central Bank of Nigeria (CBN) threatens to stifle its rapid growth. The CBN said that the ban was enacted to shield Nigerians from the threats posed by digital currencies, such as money laundering and terrorism funding.
Nigeria’s Securities and Exchange Commission (SEC) has now announced that it has been negotiating with the banking watchdog to find a way through the ban. The SEC’s director general, Lamido Yuguda, announced his organization’s activities when presenting at a recent virtual capital markets industry gathering.
“We are in discussion with CBN for both understanding and better regulating of this market. We will be able to come back to you later to inform you of the outcome of these engagements,” he told the attendees.
The SEC chairman stated that the ban has had a significant impact on the digital currency industry. “You are aware that the recent CBN prohibition on crypto exchanges accessing Nigerian bank accounts has disrupted the market for crypto assets. Remember that no one can work in the Nigerian stock market unless they have access to a Nigerian bank account,” he said.
Prior to the CBN’s abrupt ban, the SEC has been working on a regulatory mechanism for the industry. The prohibition, however, hampered this process. Before it can return to its previous mandate, the regulator must first insure that the banking ban is lifted.
“Because of the lack of access to commercial bank accounts, we had to suspend our own guidelines of September 2020. The implementation of that circular is suspended until these operators are able to have access to Nigerian bank accounts.”
Yuguda is also hopeful that the two regulators will be able to address the banking problem, enabling Nigerian innovators to use BSV and other digital currencies to fuel new and more powerful financial structures.
Nigerian digital currency companies have been hit by one setback after another as the government tightens its grip. The most recent is the lack of access to the country’s ubiquitous KYC scheme, as well as the ban verification number (BVN). Digital currencies and other fintech startups must now face additional expenses to complete one of the most important onboarding procedures.