Does Nigeria want to legalize the use of Bitcoin?

Nigeria is considering amending the 2007 Investment and Securities Act. According to the spirit of the amendments proposed by the House of Representatives on the Nigerian Capital Market and Institutions, the use of Bitcoin and other cryptos will now be legal in the country. If passed, this law will bring one of the thriving sectors of the Nigerian economy out of illegality.

The use of Bitcoin and other cryptocurrencies could be legalized in Nigeria as part of the update of the 2007 Investment and Securities Act. According to Ibrahim Babangida, the chairman of the House of Representatives Committee on Capital Market and Institutions in Nigeria, as quoted by local sources, the amendments to the text could grant Bitcoin the status of investment capital.

According to Ibrahim Babangida, the update of the regulatory framework for the cryptocurrency is in response to two constraints. First, this Nigerian administrative executive notes that his country is significantly behind in the regulation of the crypto industry. Second, the roles of state regulators in the crypto sector are not explicitly defined. Finally, the cross-border nature of crypto defeats any efforts at prohibition as observed in Nigeria.

We need to be up to date with global practices. Recently, there have been many changes in the capital market, especially with the introduction of digital currencies. These currencies are borderless. You can stay here in Nigeria and invest in the United States, Canada or anywhere else.

Ibrahim Babangida

In light of these multiple challenges, Ibrahim Babangida hopes the new law will update the country’s legal framework. In addition, this law will define the roles of the Central Bank of Nigeria (CBN) and Nigeria’s Securities and Exchange Commission (NSEC) regarding cryptocurrencies. Most importantly, this new law is expected to bring the crypto industry out of illegality.

Crypto always fought, but never killed in Nigeria

Nigeria is one of the countries vigorously fighting cryptocurrency. In February 2021, the Central Bank of Nigeria (CBN) banned banks in the country from trading in cryptocurrency. Bank accounts suspected of using cryptocurrency were simply frozen. Users of the cryptocurrency have been arrested and detained.

The launch of the central bank’s digital currency has only strengthened this crackdown. To force the adoption of eNaira, Nigerian authorities have imposed all sorts of financial restrictions. The latest is the $225 limit on ATM withdrawals.

Despite all these restrictions, Nigeria has remained a crypto-friendly country. According to a survey by the exchange Kucoin, as many as 33.4 million Nigerian adults are cryptocurrency holders. That’s 35 percent of the country’s adult population, far behind the 1 percent of those who use the eNaira, which is struggling to convince Nigerians.

While Nigeria’s Securities and Exchange Commission (NSEC) denies Bitcoin the status of a digital asset, the Nigerian House of Representatives on the Capital Market and Institutions is thinking of legalizing the use of this cryptocurrency. It is a real state battle that we will witness in the coming days. It is ultimately up to the Nigerian parliamentarians to decide on the regulatory direction.