More than two weeks after the ban on cryptocurrency in Nigeria, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have agreed to collaborate and conduct research with a view to finding ways of regulating the Cryptocurrency market.
They said this at a virtual lecture organized by the Association of Capital Market Academics of Nigeria (ACMAN) in Abuja on Sunday, the News Agency of Nigeria (NAN) reported.
ACMAN is a network of researchers in capital markets, especially lecturers in the country’s universities.
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Timi Agama, Head of Department, Registration, Exchanges, Market Infrastructure and Innovation Department of SEC described the cryptocurrency market as an air that could currently not be caged or regulated.
He noted that cryptocurrency was a market of about two trillion dollars which could not be ignored. According to him, the world cannot be moving forward and we will be static.
Agama said that although the SEC or the capital market would not accommodate or encourage any fraudulent practices that allowed for money laundering, cryptocurrency was a market to look into.
“There is a lot of investment moving into the cryptocurrency market and the tendency is that it will reduce the amount of investments in the stock market.
“Part of the desire of the SEC even in the future is to provide a regulatory framework that will take care of all these challenges that we have seen internationally and the entire world is grappling with in terms of cryptocurrency and digital assets.
“For us at the SEC and capital market, it is something to look at, the world cannot be moving forward and we will be static, no.
“It is important for us to review, understand, appreciate and introduce regulations that will guide the movement of the market in this direction.
“A market that has opportunity for ICOs, derivatives, is not a market we can ignore.
“ It is our desire that we do more work, collaborate as regulators and analyze to make sure that we provide a level playing field where Nigerians, international investors and whoever is interested in this space will be comfortable and happy.
“I hope that in doing that, we are going to be able to drive foreign portfolio investment, Foreign Direct Investment (FDI) into this country and build our capital market,’’ he said.
Kevin Amugo, Director, Financial Policy and Regulation Department of the CBN, said the ban was to enable it to work together with stakeholders in addressing the anonymity of the technology.
Mr. Amugo said the CBN would continue to develop policies that would optimize the opportunities of the financial technology industry and promote the economic landscape of the country.
He said that consumer protection was a huge challenge in the cryptocurrency market as it was speculative and no economic fundamentals drove its price.
“The committee on cryptocurrency headed by the National Security Adviser and members are EFCC, NFIU, SEC, NAICOM and all regulators to strategize and come up with a national position not a monetary policy position.
“We have issued our initial draft but COVID-19 impeded our efforts to conclude our actions.
“Because of interests crypto has regenerated, I think it is high time we reconvened and ensure that we take a national position, so that what is issued is a national position not a CBN’s or SEC’s position.
“We are not stifling fin-tech operations, CBN has been proactive in granting licenses to fin-tech operators.
“The way forward for us will be continuous engagement, ongoing consultations and academic research.
“We are engaging internationally and locally to ensure that we come out with a harmonized and implementable position,’’ he said.
Gbite Oduneye, Chief Executive Officer of the Eagle Global Market (EGM) Lagos, appealed to the CBN and SEC to look at ways to safeguard against money laundering in the market.
Mr. Oduneye appealed to regulators to find ways to regulate the cryptocurrency market as there were prospects in it.
“We understand the difficulties in the market but the regulators must organize and look for ways, organize and make people operate the way they want in the market.
“Every new innovation will come with a number of difficulties but we have the innovative minds, great regulators that can enable us to take advantage in this,’’ he explained.
This development reveals that the CBN did neither research nor consultation with stakeholders before it made the decision to ban the operation of crypto exchanges.
In reaction, analysts have described the decision as “irrational,” saying that it tells terribly about the regulator.