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The Nigerian Senate Committee on Capital Markets has called for the regulation of cryptocurrency and warned that the country’s unclear position could be costing the country. The committee also urged the government of Bola Tinubu to develop the capital and crypto markets to defend the local currency.
Nigeria’s Ambiguous Stance on Crypto
The Nigerian Senate Committee on Capital Markets has called for the regulation of cryptocurrency to protect investors who are already engaged in digital asset trading. The committee chairman, Osita Izunaso, argues that regulation is the only logical step to take since authorities have failed to stop residents from trading crypto assets.
According to a local report, Izunaso made the remarks shortly after Emomotimi Agama, the recently appointed director-general of the Nigerian Securities and Exchange Commission, appeared before the committee. Izunaso, who briefed journalists shortly after screening Agama and three commissioners, cautioned that Nigeria could be losing out because of its unclear position on cryptocurrency.
Despite having one of the largest crypto markets globally, Nigeria has not maintained a coherent position on crypto assets. This inconsistency was at one point evident in the differing stances of the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). While the SEC has consistently signaled its willingness to regulate crypto assets, the CBN took measures to suppress the growth of crypto trading.
The departure of former Central Bank of Nigeria (CBN) governor, Godwin Emefiele, led to a gradual shift in the central bank’s stance on cryptocurrencies. This shift culminated in the rescinding of the CBN’s February 5 directive. However, when the local currency rapidly depreciated against the U.S. dollar earlier this year, Nigerian authorities responded by targeting alleged currency speculators who were using crypto exchange platforms like Binance.
Since then, Nigerian officials have taken measures to restrict crypto trading including ordering global crypto exchange platforms to delist the local currency. Additionally, the West African nation has taken strong actions against Binance, accusing the platform of facilitating currency manipulation.
Developed Capital and Crypto Markets: A Boon for Local Currency
Despite these measures, Nigeria remains among the top five countries with the keenest interest in bitcoin globally. This apparent reality has prompted the Nigerian Senate Committee on Capital Markets chairman to urge Bola Tinubu’s administration to develop the capital and crypto markets as a means to defend the local currency.
“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.
Meanwhile, Agama, who is seen as pro-innovation, has vowed to turn around the Nigerian capital market and change the narrative. He added that the SEC will introduce innovative programs that will lead to the creation of world-class companies.