The Nigerian government will reportedly soon pass a law that will recognize the usage of Bitcoin (BTC) and other cryptocurrencies as a means to keep up to date with global practices.
Nigeria is considering introducing legislation to make the use of bitcoin and other cryptocurrencies legal, backpedaling its previous position in the sector.
A local newspaper reported that Babangida Ibrahim, the chairman of the Nigerian House of Representatives Committee on Capital Markets and Institutions, provided information regarding the proposed law that would amend the “Investment and Securities Act 2007” to recognize Bitcoin as legal capital for investment.
The Securities and Exchange Commission of Nigeria would accept cryptocurrencies and other digital monies as investing capital if the bill becomes law. Ibrahim stressed the need for an effective and dynamic capital market in the nation, for which keeping abreast of international best practices is a need, in a statement.
“In recent times, there are a lot of changes within the capital market, especially with the introduction of digital currencies, commodity exchanges and so many other things that are essential that need to be captured in the new Act. As I said, it is better to talk about this after consideration of the reports.”
New Bill Doesn’t Lift Initial Ban
The report comes nearly 24 months after Nigerian government banned cryptocurrency trading in February 2021, when the Central Bank of Nigeria (CBN) ordered local cryptocurrency exchanges and service providers to halt operations and ordered banks to shut the accounts of anybody found trading cryptocurrency.
Despite the ban, Nigeria has emerged as one of the world’s fastest-growing Bitcoin adopters. It has 50% monthly active adult crypto traders, the highest in the world as per a recent report by global research firm Morning Consult. The growing appetite for the asset class comes amidst a crashing Naira, with Bitcoin and stablecoins holding more preference for many Nigerians who want to protect their wealth.
However, Ibrahim, who led Nigeria from 1985 to 1993, believes that the law’s passage does not represent a complete reversal of the prohibition but rather a secondary examination of the CBN’s authority:
“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.