- Reports have made rounds concerning Nigeria’s decision to allow Bitcoin as a payment solution.
- Hopes for the change in government policy hinged on the proposed amendment to the Investment and Securities Act 2007.
- Nigerian crypto enthusiasts say they need their government to back digital assets for good as it will, in turn, push up the eNaira.
Africa’s most populous country, Nigeria, may be next in line to consider bitcoin and other cryptocurrencies as legal tender in 2023 as it prepares a law to recognize digital assets.
Babangida Ibrahim, the House of Representatives Committee Chairman on Capital Markets, said in an interview that the law which will recognize digital assets is being pushed to keep up with “recent global practices.”
“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 with global practices.”
The hopes of recognizing Bitcoin rests on the proposed Investment and Securities Act which will empower the Securities and Exchange Commission (SEC) to “recognize digital assets and funds as capital for investments.” The landmark legislation would also set clear-cut roles of administrative bodies in the country regarding digital assets.
The roles of the Central Bank and the SEC have clashed in several jurisdictions regarding the control of virtual currencies. In Nigeria, users called out the Central Bank after it placed a ban on cryptocurrencies and exchanges last year, saying it has encroached into the territory of the SEC.
The proposed law comes as the new e-naira’s poor adoption makes rounds. The country’s Central Bank digital currency (CBDC) has only recorded a meagre 0.5% a year after its launch, with many blaming the government’s indecisive policies regarding the state of blockchain and virtual currencies.
Nigeria’s policy holding a potential mass adoption
With a population of over 200 million people, Nigeria has an edge in terms of potential blockchain and web3 projects as investors can leverage the growing population. Despite this advantage, most projects cited in Africa have gone to neighbouring countries due to the government’s mixed blockchain policies.
In 2021, the Central Bank of Nigeria issued a statement prohibiting the activities of digital asset exchanges in the country as well as other cryptocurrency activities. The ban was far-reaching as it compelled banks to close accounts related to cryptocurrencies. Despite all this, Nigeria’s potential for digital asset adoption remains intact as the 11th-highest crypto market in 2022.