Nigeria's Crypto Boom: Navigating Rapid Growth Amid Regulatory Changes
Cryptocurrency is becoming more popular around the world. As of 2024, about 6.8% of the global population owns cryptocurrencies, which means more than 560 million people use them. One country that's making big strides in this area is Nigeria, with a 6.50% crypto-ownership rate. This growth demonstrates Nigeria's increasing role in the global crypto landscape.
Nigeria’s SEC Updates Cryptocurrency Rules
Nigeria’s Securities and Exchange Commission (SEC) recently updated its rules on Digital Asset Issuance, Offering Platforms, Exchange, and Custody. In a public statement, the SEC said these changes aim to create a stronger regulatory system to meet the specific challenges of digital asset markets.
"The purpose of the amendment is to expand the scope of regulation in line with the current realities," said the SEC.
These new rules are designed to deal with the complexities and risks of digital assets, ensuring a secure and well-regulated environment for everyone involved.
Introducing the Accelerated Regulatory Incubation Programme (ARIP)
As part of its efforts to regulate the cryptocurrency market, the Nigerian SEC has launched the Accelerated Regulatory Incubation Programme (ARIP) for Virtual Assets Service Providers (VASPs). The ARIP offers a structured way for VASPs to comply with the new regulations.
To make it easier, the SEC has set up a special application window on its ePortal for VASPs in the program. VASPs have to complete the onboarding process within 30 days from the circular’s issuance. This initiative aims to streamline the compliance process, ensuring that VASPs operate under the updated regulatory framework.
Nigeria’s Commitment to Cryptocurrency
Despite past regulatory issues, Nigeria has seen significant growth in cryptocurrency use. In December 2023, the Central Bank of Nigeria (CBN) lifted its 2021 ban on crypto transactions and introduced new guidelines to fight money laundering and terrorist financing. These rules now require VASPs to follow Know Your Customer (KYC) guidelines, although there are concerns about user privacy.
Still, Nigeria has become a leader in peer-to-peer (P2P) crypto trading volume and overall transaction growth, driven by the popularity of stablecoins as a hedge against inflation.
Could the U.S. Learn from Nigeria?
As the crypto market evolves, Nigeria’s regulatory approach could serve as a model for other countries, including the United States. Both nations are working to regulate digital assets amid rapid adoption, and there may be valuable lessons to learn from Nigeria's experience.
Keywords: Nigeria cryptocurrency, Nigeria SEC, crypto ownership, digital assets, Accelerated Regulatory Incubation Programme, Virtual Assets Service Providers, peer-to-peer crypto trading, stablecoins
