Nigeria’s SEC to licence crypto exchanges as adoption surges

The Abuja-based Securities and Exchange Commission is looking to issue its first licenses for digital service and tokenised assets this month, Director-General Emomotimi Agama said.

“Being a crypto enthusiast and fintech enthusiast, I can tell you without doubt that this is going to happen sooner than you think,” Agama said in an interview on Bloomberg Television. “We must support the youths of this country to be able to achieve the benefit that is accruable in fintech. The market size is huge and it is growing.”

The start of regulation aligns Nigeria to other jurisdictions including the European Union, South Africa and Botswana, which have taken steps to govern the asset class. Regulators across the globe are seeking better ways to rein in crypto following a 2022 crash in prices that led to a slew of bankruptcies, scandals and billions in investor losses.

Nigerian authorities banned banks from supporting crypto transactions due to concerns that traders on digital-currency platforms are manipulating the exchange rate of the naira, which has depreciated about 70% against the dollar since June last year.

The government in February blocked access to the world’s biggest crypto exchange operated by Binance Holdings and later prosecuted its executives over allegations of illicit flows and speculation on the naira, which it said deprived the nation of tax revenue and weakened the local currency.

The crackdown on Binance hasn’t deterred young, tech-savvy Nigerians, who have moved to the Bitkoin Africa and Quidax platforms for their Bitcoin transactions, Agama said in June. The volume of crypto transactions in the country climbed 9% to $56.7 billion in June 2023 from a year earlier, Chainalysis said in a report. The figure is just “the tip of the iceberg’ considering many transactions are not reported, Agama said at the time.

The SEC wants “to provide a platform where people can formerly do these things and we are able to get all of the information that we need,” Agama said.  “What we will not encourage is the use of cryptocurrency to manipulate our currency.”