Nigeria's SEC suspends planned crypto regulations amid central bank ban

Published at: Feb. 12, 2021

The Nigerian Securities and Exchange Commission has put its plans for regulating cryptocurrencies on hold following the recent ban by the central bank prohibiting financial institutions from servicing crypto exchanges.

In an emailed statement quoted by the Daily Post on Friday, the 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 recognized digital assets back in September 2020. At the time, the SEC said it was set to create a regulatory sandbox for cryptocurrencies as part of efforts to fully regulate the market.

For the SEC, its latest statement is in response to inquiries from stakeholders as to the perceived policy conflicts between its September announcement and the central bank circular. According to the commission, the regulatory sandbox proposal for non-crypto fintech firms focusing on the capital market will still continue as planned.

Reactions to the central bank’s crypto ban have seemingly been split along ethnic and geopolitical lines across the country with the more progressive-minded elements in the polity arguing against the move. The central bank for its part has said the move was taken to combat the use of virtual currencies by criminal elements in Nigeria.

The Senate plenary session on Thursday saw some senators calling for a more nuanced approach by the central bank in regulating cryptocurrencies. However, Senator Sani Musa of the Niger East Senatorial District claimed that Bitcoin had made the naira “almost useless.”

As part of its deliberations, the Nigerian Senate resolved to invite the CBN governor to appear before the appropriate committees to discuss possible mechanisms for future cryptocurrency regulations in the country.

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