Following the uplifting of the ban on banks in Nigeria, the crypto community expressed their excitement about the new rules. In a December 23 publication, industry leaders who collaborated with the Central Bank of Nigeria (CBN) in revising the existing crypto regulation were considered to be in a better position than before.
A statement from Olumide Adesina, a renowned Nigeria Finance expert, revealed the possibility of crypto firms who supported the authority to amend the crypto regulatoion to receive legal powers to be government gatekeepers for the digital sector.
Nigeria Lifts Crypto Ban
He recognized the remarkable contributions made by industry leaders in redefining the crypto ecosystem. Instead of condemning the regulators, some critical players in the digital sector supported the government in developing a friendly crypto environment in Nigeria.
When digital assets were still a new concept, Nigerian regulators imposed restrictive measures on crypto activities to combat terrorism financing and money laundering.
After crypto gained popularity in the West African country, the imposed anti-crypto measures became unmanageable, forcing the regulators to revise the rules. In a recent study, Nigeria ranks among the leading countries in Africa with the highest crypto adoption.
The surge in crypto activities and the ever-changing nature of the financial sector forced the regulators to team up with key industry players to amend the regulations on digital assets.
Following a series of meetings, the regulators agreed to loosen the ban on crypto in Nigeria. A few days ago, the CBN removed the prohibition for the engagement of banks and financial institutions in crypto activities.
Rise of Crypto-Savvy Population in Nigeria
The new provision is set to be enforced in 2024 to enable banks and financial institutions to support crypto transactions. According to Adesina, CBN’s crypto move aims to restore the country’s financial stability.
Adesina admitted that the new rules for digital assets seeks to strengthen the Nigerian financial sector through crypto and blockchain technologies. Apart from this, the lifting of the crypto ban in Nigeria has attracted the attention of key industrial players in the financial industry.
Commenting on the proposed regulation on digital assets, Adesina noted that the pro-crypto move triggered an increase in crypto activities. He noted that the price movement of the NGN/USDT stablecoin established an upward trajectory following the announcement of the new crypto rules.
Moreover, the executive observed that stablecoin issued by banks in collaboration with fintech companies will support the growth of the Nigerian financial sector. He confirmed that the stablecoins issued by the local companies will play a critical role in expanding the peer-to-peer (P2P) market.
Nigeria Seeks to Create Crypto-Friendly Environment
In a recent report, Nigeria ranks among the leading P2P markets in the world. The growth of the P2P market emanated from the restrictive measures embraced by the West African country in 2021.
Following the exciting growth of the Nigerian P2P sector with the changes in the financial industry, the Nigerian regulators have hiked the interest rates for these products. Furthermore, Adesina admitted that it would be absurd for the market speculators to compare the P2P rates with the transaction fees charged by the crypto exchanges.
He envisioned that crypto exchanges must be operational for the regulators to levy interest rates on digital assets. Adesina argued that the regulators estimate the interest rates based on the daily crypto activities.
