Nigeria To Recognize Bitcoin And Other Cryptos

According to a Nigerian newspaper, Bitcoin and other cryptocurrencies will soon be legalized in Nigeria after the country's House of Representatives Committee on Capital Markets and Institutions chairman, Babangida Ibrahim, expressed optimism about the topic. The bill would change the Investments and Securities Act of 2007 to make Bitcoin widely accepted as a legitimate form of investment capital.

Despite the country's February 2021 letter prohibiting regulated financial businesses from "dealing" with Bitcoin and crypto, the digital currency still has a sizable following in Nigeria. According to the report, Ibrahim also stated that the country lacked the necessary regulations for the new industry. As Ibrahim put it:

Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date global practices.

The proposed bill would address Nigeria's growing Bitcoin usage and could act as a significant catalyst for the country if it were to pass. A Bitcoin village is being built, Bitcoin-related companies are doing charitable work, Nigerian Bitcoiners are participating in a massive development project, and Bitcoin mining is thriving despite the country's current ban on cryptocurrencies.

Ibrahim pointed out that Nigeria must flow with global economic innovations by stating:

“Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date global practices. 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. When it comes to digital currencies, they have different names and it depends on the jurisdiction. These currencies, they don’t have boundaries. You can stay here in Nigeria and invest in the United States, Canada or anywhere. They are digital. That is why – if you remember – when crypto currency 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. All these are some of the issues that we have considered we have to regulate them. It is not that they are illegal but we don’t have regulation for them. So, these are some of the reasons why we need to review the Act and put some regulations for most of the activities – derivatives, commodity exchanges, digital currencies and so many other things. It is not about lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria. The CBN is regulating financial markets and the Securities Exchange Commission regulates the capital market."

The ENaira and the Future of Cashless Transactions in Nigeria

In 2021, Nigeria's eNaira, a central bank digital currency (CBDC), was introduced. Alongside the introduction of its digital currency, the country has also announced limits on the amount of cash citizens can withdraw to promote alternative payment methods. The Central Bank imposed weekly limits of $225 for individuals and $1,123 for businesses on their ability to withdraw cash from ATMs. When Nigeria tried to go cashless, no more than $45 in cash could be withdrawn from ATMs daily in any denomination higher than $0.45. But in some cases, customers can still withdraw considerable sums, though they'll have to pay a processing fee of 5% to 10%.