Ministry of Finance backs SEC’S move to regulate cryptocurrency space in Nigeria

The Ministry of Finance said it is working with the Securities and Exchange Commission (SEC) to provide a regulatory environment for blockchain space, particularly as it relates to cryptocurrencies in Nigeria.

Armstrong Takang, special adviser to ICT, Minister of Finance disclosed this at the ‘Fintech in Nigeria. State of Play’ event organised by The Economists Intelligence Unit (EIU) in partnership with Mastercard.

According to Takang, while the federal government of Nigeria sees opportunity in the adoption of blockchain and the evolving cryptocurrency market, it is proper to lay a solid foundation for all stakeholders in the market including users, operators, and government authorities.

“Consumers who are likely to benefit from digital currencies are still not sure, because they are concerned about privacy. The SEC is already looking at how to create a proper regulation and looking at ways that a lot of that transactions are conducted through the platform. We will make the announcement in due time,” Takang said.

Apart from SEC, the Ministry is also working with the Ministry of Industry and Trade as well as Nigerian Customs because of the implications of cross-border transactions that space enables.

The SEC had on September 14 released a regulatory document that designated the title of “securities” to crypto-assets and hence will be regulated by it.

According to the capital market regulator, the power it has to regulate the crypt asset class derives from Section 13 of the Investment and Securities Act, 2007. The section conferred the powers on the Commission as the apex regulator of the Nigerian capital market to regulate investments and securities business in Nigeria.

“Consequently, the SEC will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions,” the SEC said.

While the SEC regulation is still in the works, the National Information and Technology Development Agency (NITDA) released a Draft National Blockchain Adoption Strategy which it presented to stakeholders to review. It also disclosed that it was working with the Central Bank of Nigeria (CBN) to achieve regulation for the entire blockchain industry. By collaborating with other agencies, some stakeholders say it could mean the CBN does not plan to release a separate regulatory document.

“With CBN being one of the key stakeholders in the proposed blockchain adoption strategy, I do not think that CBN will eventually introduce a policy or regulation that is not aligned with the principles and strategies in the proposed document. Besides, CBN, through its representative at the stakeholder engagement, indicated its readiness in principle to provide regulatory support,” Paul Ezeafulukwe, President of Stakeholders in Blockchain Association of Nigeria (SIBAN) told Businessday.