In a pivotal move set to shake up Nigeria’s digital landscape, the Federal Government is contemplating the suspension of the $56.7 billion peer-to-peer cryptocurrency market. The decision looms large following a crucial meeting between the Securities and Exchange Commission (SEC) and digital asset operators, scheduled for Monday.
Nigeria witnessed a staggering nine percent surge in crypto transactions, soaring to $56.7 billion between July 2022 and June 2023, as revealed by Chainalysis’ 2023 Geography of Cryptocurrency Report. However, mounting concerns over illicit activities and naira exchange rate manipulation have prompted the SEC to tighten its regulatory grip on the crypto space.
This regulatory crackdown gained momentum earlier this week when the Central Bank of Nigeria (CBN) halted major fintech firms from onboarding new customers amid an ongoing audit of their Know-Your-Customer processes. Fintech giants like Opay and PalmPay sent stark warnings to customers against engaging in cryptocurrency trading, threatening account blocks for non-compliance.
The looming threat of blocked accounts has sparked a wave of criticism, especially from the 33.4 million individuals actively involved in cryptocurrency trading, many of whom rely on it as their primary income source.
As anticipation builds for Monday’s pivotal meeting, speculations abound that the government may announce a temporary halt in P2P crypto trading to devise comprehensive regulations for the sector. However, conflicting reports suggest alternative strategies may be on the table, including engaging crypto stakeholders for input on new regulatory frameworks.
While official confirmation from the SEC is pending, industry insiders have confirmed the meeting’s occurrence, facilitated by the newly appointed SEC Director-General, Dr. Emotimi Agama.
Meanwhile, concerns over regulatory compliance and identity management loom large, with fraudulent activities escalating in the digital payments sector. The proposed regulatory changes, including a proposed 400 percent increase in crypto firm registration fees, underscore the government’s resolve to rein in the sector’s excesses.
As stakeholders brace for Monday’s watershed meeting, the outcome remains uncertain, with industry leaders hopeful for a resolution that balances regulatory oversight with innovation, safeguarding both investors and the integrity of Nigeria’s financial ecosystem.