The Securities and Exchange Commission (SEC) said that it has set up a Fintech division to study cryptocurrency investments and products in order to help it initiate policies that will help regulate the sector.
This disclosure was made by the Director-General of SEC, Lamido Yuguda, during a virtual interview with Reuters on Thursday in Abuja.
Yuguda said, “We are looking at this market closely to see how we can bring out regulations that will help investors protect their investment in blockchain.’’
Although he did not provide any time frame for issuing the regulations, the SEC boss said the capital market regulator will step in with regulations once crypto is allowed within the Nigerian banking system.
The SEC has sought to regulate crypto on the grounds that they qualify as securities transactions.
Yuguda disclosed that the recent launch of the country’s digital currency, e-naira, is the result of its engagement with the CBN.
The commission is seeking to work with fintech firms to boost the marketing of domestic securities to prevent capital flight.
He said the SEC is looking to boost savings through investment schemes, which currently have over N4 trillion ($9.7 billion) under management split between public and private fund managers. Yuguda also said the regulator has asked private managers to put in place custody arrangements to protect investors.
What you should know
It can be recalled that earlier in February 2021, the CBN ordered all financial institutions to stop facilitating cryptocurrency-related transactions, although Nigeria is regarded as one of the biggest markets for crypto trading.
The apex bank earlier in August blocked the accounts of 6 firms for allegedly sourcing funds from illegal foreign exchange operators to buy foreign securities and cryptocurrencies.
The use of bitcoin, the original and biggest cryptocurrency, has boomed in Nigeria in recent years, driven by payments from small businesses and a weakening naira currency, which makes it difficult to get the U.S. dollars needed to import goods or services.
SEC has been under pressure from some experts and stakeholders to introduce guideline framework for the trading operations of Cryptocurrency in Nigeria.
According to them, the responsibility for creating a framework for Cryptocurrency trading in Nigeria lies with SEC and not the CBN, as it is done in the United States of America and other developed nations.
SEC had earlier in April revealed that it is working with the CBN for a better understanding and regulation of cryptocurrencies in the country