Nigeria Releases New Rules Classifying Crypto as Securities
In a move that might boost crypto trading in Nigeria, the nation’s Securities and Exchange Commission (SEC) has rolled out “rules on issuance, offering platforms, and custody of digital assets” for virtual firms, according to Bloomberg.
The rules offer more clarity on digital assets’ trading in a nation that already sits among the largest crypto markets globally.
As a change of tone, the nation’s central bank had prevented commercial lenders from undertaking crypto transactions or operations last year.
Owen Odia, Luno’s Nigeria country manager, noted:
“The regulations could act as the precursor for a surprise move from the central bank to reverse its approach, providing critical foundations for mass crypto adoption across the country.”
According to Paxful, a Bitcoin peer-to-peer (P2P) marketplace, Nigeria has the largest crypto transaction volume outside the United States.
Moreover, a recent study by crypto exchange KuCoin revealed that Nigerians were entering the crypto space because of the lack of affordable financial services and high inflation rates, given that 35% of them were engaged in this sector in the last six months.
The research suggested that cryptocurrencies were filling the gap in the traditional financial market because Nigerians were using them as an alternative for storing and transferring assets.
The KuCoin study also noted that P2P was a favored strategy among Nigerians, given that 65% of crypto investors in the nation made fiat deposits to cryptocurrencies through P2P platforms. Therefore, the latest development might accelerate crypto adoption on Nigerian soil.
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