The Nigerian Securities and Exchange Commission, the country’s financial market regulator, has put on hold plans to regulate cryptocurrencies after the central bank’s latest circular in suspending bank accounts of crypto companies.
According to a report by the local news portal, Daily Post, the SEC affirmed its stance after receiving questions related to policy conflicts between the two regulators.
“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,” the SEC said in a statement.
According to data,
Nigeria is one of the top countries in Africa with crypto penetration. 60,215 Bitcoins were traded in Nigeria in the last five years, which is only behind the US.
The Nigerian SEC recognized cryptocurrencies in September 2020 and planned to create a regulatory sandbox for digital currencies. Though the sandbox program for crypto companies has been suspended, it will continue for non-crypto fintech firms.
The CBN letter which was signed by Bello Hassan, Director of Banking Supervision, said it was reminding regulated banking institutions that “dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited” and any breaches of the order would face “severe regulatory sanctions.”
The crypto community reacted strongly as expected against the ban, engaging social media campaigns to tender their direst. Many are now moving to peer-to-peer exchanges for Bitcoin purchases.
“Bitcoin is peer-to-peer, meaning that it can be transacted without intermediaries. Your bank may be able to shut down your account but no one can shut down your bitcoin wallet. This development, while concerning, will not be the end of bitcoin in Nigeria,” said Nigerian Bitcoin Core contributor Tim Akinbo on Twitter
This news by CBN divided the Senate when it reached the upper chamber, and many senators were of different opinions. While some progressive senators demanded proper explainable approach towards cryptocurrencies, many argued that that Bitcoin acceptance has devalued the local currency.