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George Spencer

September 3, 2021

Nigeria’s SEC Develops a Fintech Unit to Study Crypto

Nigeria’s Securities and Exchange Commission (SEC) has set up a Fintech unit to study crypto products and investments in order to help institute protocols that will assist in regulating the sector. So far in 2021, financial institutions that operate in Nigeria have been the spindle of a government crackdown of cryptocurrencies in the country.

Back in February, the central bank placed a notorious ban against crypto exchanges in the country. The ban was lifted a few weeks after of course, but it might be what paved way for the SEC to introduce the regulations that are hoping will regularize the crypto industry and offer investors protection.

The Director-General of SEC, Lamido Yuguda, made the disclosure about the regulations during a virtual interview with Reuters on Thursday in Abuja. He said that they are looking at the market closely in order to see how they can develop regulations that will help protect investors and their investment in the Blockchain industry. However, the exact time for issuing the regulation has not been provided.

Mr. Yuguda only said that the capital market regulator will step in with the protocols once crypto is allowed within the Nigerian banking system. The SEC sought to regulate crypto on the grounds that they qualify as securities transactions. The SEC boss said that the recent launch of the country’s digital currency, e-naira, is the result of its engagement with the CBN.

A report on Sept 2nd has shown that the SEC has developed a dedicated fintech unit assigned to study crypto and the blockchain industry. The agency is also reportedly looking to work with Fintechs to strengthen the domestic market for securities to dissuade capital flight, which continues to beset multiple sectors.

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Mr. Yuguda said that the SEC is looking to boost savings through numerous investment schemes. They currently have over $9.7 billion (N4 trillion) under management split between public and private fund managers. He also said the regulator has asked private managers to put in place custody arrangements to protect investors.

Amidst it all, the Central Bank of Nigeria is partnering with a Barbados-based fintech as a technical partner for its proposed e-naira digital currency, preliminary guidelines that were issued back in August. At a meeting about the country’s Monetary Policy Committee in Abuja this spring, CBN Governor Godwin Emefiele expressed his confidence that cryptocurrencies like Bitcoin (BTC) will eventually be legal in the country but stressed that the government would do its best to prevent them from being used to do illicit activities.