The Nigerian Senate Committee on Capital Markets has called for the regulation of cryptocurrency. This move is in a bid to protect investors and stabilise the Nigerian economy,
Committee chairman Osita Izunaso emphasised that regulation is essential since authorities have failed to stop Nigerians from trading digital assets. Izunaso’s comments followed a session with Emomotimi Agama, the newly appointed director-general of the Nigerian Securities and Exchange Commission (SEC).
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Despite having one of the largest crypto markets globally, Nigeria’s stance on cryptocurrency has been inconsistent. The Central Bank of Nigeria (CBN) and the SEC have had differing views, with the SEC advocating for regulation and the CBN previously taking steps to suppress crypto trading. The recent change in the CBN’s leadership and the central bank’s subsequent policy reversals have added to the uncertainty.
Impact of Crypto Naira and Economic Stability
The Nigerian Senate Committee’s call for regulation is not just about investor protection; it’s also about economic strategy. With the naira depreciating rapidly against the U.S. dollar, the committee believes that developing the capital and crypto markets could bring much-needed liquidity to the system. Izunaso pointed out that the unclear regulatory stance is undermining the naira’s value and overall economic stability.
“That is what is crushing the naira and making the naira so little when it’s competing with other currencies. But if we develop our capital market, and develop our crypto market, we will bring more liquidity into the system. That will help to cushion all the problems we have,” Izunaso stated.
Push for Innovation and Economic Growth
Emomotimi Agama, viewed as pro-innovation, has vowed to revitalize Nigeria’s capital market. He promised to introduce innovative programs aimed at creating world-class companies and changing the market’s narrative. Agama’s vision aligns with the Senate Committee’s goals, suggesting a more collaborative approach to integrating cryptocurrency into Nigeria’s financial ecosystem.
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Despite regulatory crackdowns and restrictions, Nigeria remains one of the top five countries with the highest interest in Bitcoin. This enthusiasm underscores the potential benefits of a well-regulated crypto market. By fostering innovation and providing clear regulatory guidelines, Nigeria could leverage its strong interest in digital assets to bolster its economy and strengthen the naira.
The Nigerian Senate Committee on Capital Markets is urging the government to clarify its stance on cryptocurrency and develop robust regulatory frameworks. This move is seen as critical to protecting investors, enhancing market liquidity, and defending the local currency. As Nigeria navigates its economic challenges, embracing and regulating cryptocurrency could be a key strategy for sustainable growth and stability.