Regulation
Nigeria – Can the SEC’s new crypto rules be a model for the US?
- Nigeria has a cryptocurrency ownership rate of 6.50%, signaling rapid growth amid regulatory challenges
- The SEC of Nigeria has now implemented new rules and ARIPs to effectively protect the digital asset markets
Cryptocurrency adoption is increasing globally and recent data comes from Triple A confirms this trend. In fact, as of 2024, approximately 6.8% of the world’s population owns cryptocurrencies, which means over 560 million users worldwide.
Source: Triple.A
Among the nations making significant strides on this front, Nigeria stands out with a cryptocurrency ownership rate of 6.50%. This is another sign of Nigeria’s growing acceptance and influence in the global crypto landscape.
Nigeria’s SEC moves towards cryptocurrency adoption
Nigeria’s Securities and Exchange Commission (SEC) is now in the news after updating its regulations on digital asset issuance, offering platforms, trading and custody.
In an audience declarationThe SEC explained that these changes aim to build a stronger regulatory framework tailored to the specific challenges of digital asset markets.
“The purpose of the amendment is to broaden the scope of regulation in line with current realities.”
These revised rules aim to address the complexities and risks of digital assets, ensuring a safe and well-regulated environment for all stakeholders.
There is more?
Furthermore, as part of its efforts to regulate the cryptocurrency market, the Nigerian SEC has also launched the Accelerated Regulatory Incubation Program (ARIP) for Virtual Asset Service Providers (VASPs). In this case, ARIP provides a structured process for VASPs to comply with new regulatory requirements.
To simplify the process, the SEC has also established a dedicated application window within itself Electronic portal for VASPs participating in the program, with mandatory completion of the onboarding process within 30 days of issuing the circular.
This initiative would streamline the compliance process and ensure that VASPs operate within the updated regulatory framework.
Nigeria’s longstanding efforts
Here it is important to note that, despite the regulatory challenges of the past, Nigeria has seen significant growth in the adoption of cryptocurrency.
In December 2023, the Central Bank of Nigeria (CBN) lifted the 2021 ban on crypto transactions, introducing new guidelines to combat money laundering and terrorist financing. These rules now require VASPs to adhere to Know Your Customer (KYC) requirements, but have also raised concerns about user privacy.
Nonetheless, Nigeria has become a leader in peer-to-peer (P2P) cryptocurrency trading volume and overall transaction growth, fueled by the popularity of stablecoins as a hedge against inflation.
Should the United States learn from Nigeria?
As the cryptocurrency market evolves, Nigeria’s regulatory approach serves as a model for other nations such as the United States. Especially since they are also addressing the regulation of digital assets in a context of rapid adoption.
CEO of Robinhood Vlad Tenev he probably said it best when he stated,
Source: Vlad Tenev/X