The proposed regulation also aligns with its shift towards a cashless society. Nigeria is planning to push a law to legalize the usage of bitcoin and cryptocurrencies, backpedaling its stance on the industry.
According to a local newspaper, Babangida Ibrahim, chairman of the House of Representatives Committee on Capital Markets and Institutions of Nigeria, disclosed details about the new law that seeks to amend the existing “Investment and Securities Act 2007” to recognize Bitcoin as legal capital for investment.
Once the bill is signed into law, Nigeria’s Securities and Exchange Commission will recognize cryptocurrency and other digital funds as capital for investment. In a statement, Ibrahim emphasized the need for an efficient and vibrant capital market in the country, for which being up to date with global practices is a necessity.
“In recent time, 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. Like I said, it is better to talk about this after consideration of the reports.”
The development comes almost two years after Nigeria’s central bank banned banks from servicing crypto exchanges. The notice from CBN also mandated banks to cease the accounts of any individuals or entities involved in crypto trading activities.
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.
More recently, Nigerian authorities partnered with crypto exchange Binance to develop a digital economic zone focused on crypto and blockchain-related businesses.
Nigeria’s Push for a Cashless Society
A year after launching its own central bank digital currency – eNaira – Nigeria announced limits on cash withdrawals in a bid to drive adoption for alternative payments, a move that is expected to affect more than 200 million people.
CBN imposed new limits on over-the-counter withdrawals at just $225 per week for individuals and $1,123 for businesses.
The African nation’s cashless policy also entails capping ATM cash out at $45 per day, with only $0.45 notes and smaller denominations being available from the machines. Meanwhile, customers will still be able to withdraw larger sums in some instances but will be levied a processing fee of between 5% and 10%.