Finance Ministry, SEC working on digital currency regulation
NEWSMAN, Abuja – Ministry of Finance has revealed that it is working with the Security and Exchange Commission (SEC) formulate comprehensive regulatory framework for the digital currency and blockchain industry.
The revelation was made by the special advisor on ICT at the Ministry, Armstrong Takang who at a fintech event organized by the Economist Intelligence Unit, stated that the two public institutions have been developing a regulatory framework that will govern the blockchain industry in Africa’s largest economy.
The Nigerian government sees great opportunity in digital currencies and blockchain technology, Takang told the conference. It’s therefore laboring to develop regulations that will spark adoption and benefit the innovators and the consumers.
The revelation comes just a month since Nigeria drafted a blockchain and digital currency adoption roadmap.
The “National Blockchain Adoption Strategy” seeks to build the future of Nigeria’s economy on blockchain technology, gradually cutting down the over-reliance on oil and gas, CoinGeek reported.
Drafted by the Ministry of Communications and Digital Economy, the roadmap focused on key areas such as regulating the technology, fostering innovation, upskilling and capacity building and international competitiveness.
The Ministry, however, admitted that Nigeria lacked definitive digital currency regulations which derails adoption.
“A legal framework issued by the government has become a paramount factor that would guide and determine the successful adoption of blockchain technology in both the public and private sector,” the roadmap stated.
This lack of regulations is what the Finance Ministry and the SEC are out to change with their latest partnership.
For its part, the SEC recognized digital assets as securities in September. Acknowledging that digital assets provide an alternative investment opportunity for Nigerians, it noted the need for regulations in the industry.
“It is essential to ensure that these offerings operate in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency,” the SEC stated.
Senator Ihenyen, the secretary general of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), believes that regulators must formulate policies that seek to build the ecosystem.
In a recent post, Ihenyen stated that “Regulators in Africa must learn to see their roles as ecosystem builders, not just enforcers. This approach will put regulators in a better position to understand the market, understand the place of innovation, how policy can make innovation thrive, and the role of regulation in sanitizing the industry.”
Digital assets are recognized as commodities and governed by appropriate securities law in Nigeria following the SEC’s stunning edict on the matter back in September. At the time, the SEC said its role was to regulate this new asset class, not hinder adoption or innovation.
According to the SEC, “The general objective of regulation is not to hinder technology or stifle innovation, but to create standards that encourage ethical practices that ultimately make for a fair and efficient market.”
Bitcoin (BTC) and other cryptocurrencies are witnessing growing adoption in Nigeria as the country struggles with capital controls, devaluation and new protests targeting police corruption.
Experts appear keen on adopting blockchain, with hopes of generating $10 billion in revenue from the new technology by 2030.