The slated law comes as Nigeria's eNaira has only managed to obtain a 0.5% adoption rate, a little more than a year after its launch in October 2021.
The Nigerian government will reportedly soon pass a law that will recognize the usage of Bitcoin and other cryptocurrencies as a means to keep up to date with “global practices.”
The news was reported by Nigerian-based masthead Punch Newspapers on Dec. 18 following an interview with House of Representatives Committee on Capital Markets Chairman Babangida Ibrahim.
The report stated that if the Investments and Securities Act 2007 (Amendment) Bill is signed into law it would allow the local Securities and Exchange Commission to “recognize cryptocurrency and other digital funds as capital for investment.”
Ibrahim stressed the need for Nigeria to keep up to date with trends and developments in capital markets:
“Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices.”
The report comes almost 24 months after Nigeria banned crypto activity in February 2021, with the Central Bank of Nigeria (CBN) ordering Nigerian crypto exchanges and service providers to cease activity and mandating banks to shutter the accounts of any individuals or entities found to be engaging in trading activities.
But Ibrahim — who served as Nigeria’s president between 1985 and 1993 — insists that the passing of the law isn’t a 180-degree turn on the ban but rather a secondary review of what is within the scope of the CBN’s powers:
“It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria.”
“When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them,” he explained.
If the law passes, amendments will be made to Nigeria’s Investments and Securities Act 2007.
In addition to the assignment of legal recognition to Bitcoin and other cryptocurrencies, the law will outline the regulatory roles of the Central Bank of Nigeria and Nigeria’s Securities Exchange Commission (SEC) on matters relating to digital currencies, the report said.
The law also comes as Nigerians have also shown little to no interest in Nigeria’s central bank digital currency, the eNaira, which had only obtained a 0.5% adoption rate in October, 12 months after its launch.
The Nigerian government’s efforts to crack down on crypto activity earlier on were arguably ineffective too, as adoption continued to increase following the ban in February 2021.
From January to August last year, Nigerians only trailed the United States in Bitcoin trading volume, and over the same period, Nigerians were more likely google“Bitcoin” than citizens of any other country.
Nigerian residents were also found to be the most crypto-curious nation, according to an April research study conducted by CoinGecko. The curiosity comes as no surprise, as Nigerians continue to look to fight off rampant inflation and economic malaise.
Nigeria also recently entered into early-stage discussions with cryptocurrency exchange Binance in September to develop a crypto-friendly economic zone that will aim to support crypto and blockchain-related businesses in the region.