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The Securities and Exchange Commission (SEC) in Nigeria released a statement to clarify its position with the central bank, CBN on the ban of cryptocurrency.
The commission (SEC) said it perceived a policy conflict from the public which necessitates the said statement.
Accordingly, it presented the SEC Statement on Digital Assets and their Classification and Treatment of September 11, 2020, and the Central Bank of Nigeria (CBN) Circular of February 5, 2021, as the conflicting policies.
In its argument, it said, “We see no such contradictions or inconsistencies”.
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SEC Statement on Digital Assets of September 11, 2020
Being the regulatory body of investments and securities, the SEC explains that trading in cryptocurrency assets falls under its regulatory purview.
Therefore, its statement on September 11, 2020, is “to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows without having to hinder or stifle innovation”.
Its target is to establish standards of ethical practices that ultimately make for a fair and efficient securities market it said.
Central Bank of Nigeria (CBN) circular on cryptocurrency ban of February 5, 2021
The CBN subsequently identified certain risks in cryptocurrency and since it is the regulator of the banking system, it took the responsibility to control usage.
Without the CBN restrictions on cryptocurrency, there is a chance that investors’ protection, as well as financial system stability, will be abused.
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Cryptocurrency use in Nigeria – SEC and CBN rules
The SEC further explains that it is working with the CBN “to further analyse, and better understand the identified risks”.
In consideration of these risks, the SEC is clarifying the implementation of its Capital Market FinTech Strategy:
- For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.
- The planned implementation of the SEC Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.
