Nigeria’s Crypto Sector Seeks Clarity Under Tinubu’s Leadership

• Stakeholders urge President Tinubu to provide clear support for Nigeria’s growing crypto industry.
• Nigeria’s young population feels bewildered by recent government actions against the crypto sector.
• Despite high interest, Nigeria’s crypto sector struggles with unclear policies under Tinubu’s leadership.

Nigeria’s young population feels increasing confusion due to the government’s recent actions against the crypto industry. There is a mix of hope and concern for Nigeria’s crypto sector as stakeholders express uncertainty about President Bola Tinubu’s policies. Over the past year, the administration’s actions have left the industry in a state of ambiguity.

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President Tinubu’s campaign manifesto included a pledge to legalize crypto and blockchain technology for the country’s banking and finance sector. This decision aimed to strengthen Nigeria’s fragile economy. However, the young population now feels more bewildered by recent governmental actions. Olumide Adesina, an analyst at Quantum Economics, emphasized the need for clarity and support to unlock the sector’s potential.

Recent actions, such as the crackdown on peer-to-peer (P2P) trading and the arrest of a Binance executive, have cast the industry in a negative light. This is despite high interest from the country’s young and dynamic population. Nathaniel Luz, CEO of Flincap, a liquidity platform for crypto exchanges, stated that President Tinubu has a unique opportunity to shape Nigeria’s emerging crypto sector.

Luz noted that the crypto industry is maturing, and it is up to President Tinubu to decide how to proceed. He maintained that the administration has not done enough, and more action is expected. In May 2023, the Nigerian Securities Exchange Commission (SEC) published regulations for digital assets, suggesting authorities were seeking a middle ground between a ban and a lack of regulation.

In December, the Nigerian SEC lifted its ban on banks operating accounts for crypto service providers. The central bank stated that global trends suggested a need to regulate the activities of VASPs, including cryptocurrencies and assets. In January, the Central Bank released initial guidelines for banks opening cryptocurrency accounts. However, banks’ ability to trade or hold virtual assets within their own portfolios remains banned.

The guidelines include stringent Anti-Money Laundering (AML), Know Your Customer (KYC), and other measures. Additionally, banks must set what is described as “prudent” transaction limits and not allow cash withdrawals from crypto accounts. In May 2024, the government began preparing to introduce new regulations banning P2P cryptocurrency exchanges using the national currency, the Nigerian naira.

The lack of clear and consistent policies has left the industry in a state of uncertainty. Stakeholders urge the government to provide a supportive regulatory framework. The young population, which shows significant interest in cryptocurrencies, feels the impact of these actions. They hope for more clarity and support to fully unlock the sector’s potential.

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