SEC approves cryptocurrency in Nigeria.

On the 14th of September, 2020, SEC approved crypto-assets in Nigeria through a press release.

According to section 13 of the Investment and Securities Act, 2007, SEC is the apex regulator of Nigerian capital markets and one of its general objectives is to create standards that encourage ethical practices which will make the capital market to be fair and efficient.

Cryptocurrency has been in existence since the launching of bitcoin in 2008 but most countries of the world did not legalize cryptocurrency.

Nigeria as a country is not exceptional to this because cryptocurrency has not been legalized until the SEC approved it.

Nevertheless, Nigerians are dominant in cryptocurrency trading especially in peer to peer transactions and some exchanges have been established by Nigerian.

What are Crypto assets?

According to SEC; Crypto asset mean a digital representation of value that can be digitally traded and functions as;

(i)  a medium of exchange; and/or

(ii)  a unit of account; and/or

(iii) a store of value; but does not have legal tender status in any jurisdiction.

From the above definition of crypto assets, all cryptocurrencies are in this category since they are not backed by any law within any jurisdiction.

Cryptocurrency are developed by people using the blockchain which is decentralized as against  fiat currency that are legal tender within a jurisdiction.

According to the document, any crypto asset which can be categorized as securities must be registered under the regulations of the commission.

Any person which can be an individual or corporate body that offer any digital asset or initial coin offering must file for initial assessment.

If such coin can be categorized as securities after the initial assessment then such person (individual or corporate body) must file for proper registration.

Existing digital assets offerings prior to the review and implementation of the SEC guideline must fill for proper registration within three months.

This is a new revolution in the Nigeria capital market and it is expected to be of positive effect to the economy in the long run.

Leave a comment