CBN and SEC working on new regulatory guidelines for cryptocurrency trading in Nigeria

Nigeria’s Securities and Exchange Commission (SEC) disclosed on Friday that it is working with the Central Bank of Nigeria (CBN) to create a workable regulatory guideline for cryptocurrency trading within the country.

This announcement is coming after the Nigerian currency regulatory body CBN banned commercial banks and other financial institutions from doing business with crypto and digital financial institutions, termed as “illegal”. It was made by the Director-General of SEC, Lamido Yuguda during the 2021 post-Capital Market Committee (CMC) virtual news conference.

The DG said that the commission was in serious talks with the CBN for better understanding and finding a way forward regarding the regulation of the crypto-assets market. He added that the capital market regulator previously suspended the implementation of crypto assets guidelines due to lack of access to commercial bank accounts.

“We are in discussion with CBN for both understanding and better regulation of this market. We will be able to come back to you later to inform you of the outcome of these engagements,” Yuguda said. “But because of the lack to access to commercial bank accounts, we had to suspend our own guidelines of September 2020. The implementation of that circular is suspended until these operators are able to have access to Nigerian bank accounts.”

He noted that nobody could operate in the Nigerian capital market if such a person doesn’t have access to a commercial bank account. He, however, said that the SEC has always supported Fintechs and has made a lot of investments in developing a framework to accommodate and support their operations.

He also acknowledged that the fintech industry contributes a lot to the economy, and the CBN’s ban on access to Nigerian bank accounts disrupts the flow.

“And the truth of the matter is that while the SEC had issued guidelines in September 2020 aimed at regulating this market, for now for all intents and purposes, because these exchanges do not have access to commercial bank accounts in Nigeria, the market, for now, does not exist,” he added.

In February, the CBN ordered all Deposit Money Banks, Financial Institutions, and Non-Financial Institutions to cease doing business with crypto and digital asset platforms. These institutions were directed by the CBN to immediately close the accounts of persons or entities transacting in crypto or digital assets. It warned them of severe regulatory sanctions if they failed to adhere to the directives.