Nigeria’s Securities and Exchange Commission (SEC) plans to accelerate the issuance of cryptocurrency licenses in 2025 as part of its efforts to regulate the market and protect consumers. This move follows the launch of the Accelerated Regulatory Incubation Programme (ARIP) in June 2024, which has already granted provisional licenses to Nigerian crypto startups like Quidax and Busha. The SEC aims to provide clearer guidelines in an industry that has largely operated without formal regulation, addressing concerns over security risks, scams, and investor protection.
Nigeria has become a key player in the global cryptocurrency market, with many individuals and businesses using digital assets to hedge against inflation and exchange rate volatility. However, the lack of a structured regulatory framework has created uncertainty. A recent report by Busha found that nearly half of Nigerian crypto users cite security concerns as a major barrier to adoption. Issues such as rug-pull scams, high transaction fees, and risks associated with centralized exchanges have made regulation a crucial step for consumer protection.
The SEC’s licensing initiative marks a shift from Nigeria’s earlier restrictive stance on crypto. In December 2023, the Central Bank of Nigeria (CBN) lifted its ban on banks working with crypto companies, allowing startups to access financial services. Despite this progress, many banks remain cautious, often categorizing crypto firms as “investment companies” to avoid regulatory scrutiny. The SEC’s new approach seeks to bridge this gap by fostering a more transparent and structured environment, which could encourage institutional investors and banks to participate more actively in the crypto space.
While the SEC’s efforts are seen as a step in the right direction, the challenge lies in striking a balance between innovation and compliance. Overregulation could stifle growth and push businesses to seek friendlier jurisdictions, while lax oversight could expose users to financial risks. As Nigeria continues to refine its approach, the success of this initiative will depend on how well it aligns with industry needs while ensuring a secure and well-regulated crypto ecosystem.
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