Nigeria's Crypto Ban: Advocates Urge Rethink, Suggest Global Regulatory Adoption
Summary:
Nigerian cryptocurrency advocates argue that the ban on naira dealings in crypto trade might worsen the country's currency instability. They urge the government to instead implement the 2022 regulatory framework set by the Nigerian Securities and Exchange Commission (SEC) for effective crypto industry regulation. An associate professor emphasized that a universal adoption of international crypto standards could be the key to address the concerns of worldwide regulators, including those in Nigeria.
In response to Nigeria's cessation of naira dealings on cryptocurrency trading platforms, a group of Nigerian cryptocurrency advocates argue that such a move may compound problems for the unstable currency. Speaking to the matter, Rume Ophi, Executive Secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), put forth the viewpoint that the perspective of Nigerian authorities suggesting a correlation between global cryptocurrency platforms and the depreciation of the naira is unreasonable. He suggested that the best way for Nigeria to supervise the cryptocurrency industry effectively is by implementing a framework put forth by the Nigerian Securities and Exchange Commission (SEC) in 2022.
Due to the rapid plunge of the naira and resultant near thirty-year high inflation rate of 29.9%, government interest shifted to cryptocurrency service platforms. Notably, these platforms have seen wide usage for trading and setting an informal worth for the naira.
Iwa Salami, an Associate Professor at the University of East London, recently wrote that the fall in the value of national currencies can't be justifiably blamed on cryptocurrencies. She advocated for a more equilibrated regulatory approach by Nigerian authorities, in place of an outright ban, because there are no direct links between crypto and currency devaluation despite associations with money laundering and drug trafficking.
“Nigeria requires an approach that balances regulations, so as the industry can flourish without damaging monetary and financial stability. A balanced system can allocate resources efficiently and manage financial risks while protecting consumers and investors," Salami said.
Cointelegraph earlier reported on the crackdown on cryptocurrency trading platforms by Nigerian authorities, who held these platforms responsible for the naira's drastic devaluation earlier this year. Especially standing in the spotlight was Binance, which has since been hit with an array of accusations, including allegations of tax evasion.
Instead of outlawing these platforms, Salami emphasizes that Nigerian authorities can achieve their objectives through regulation. The authorities could use the 2022 Nigerian SEC regulatory framework to demand cryptocurrency trading platforms disclose identities of wallet holders linked with dubious activities, thereby promoting a balance between supervision and innovation.
The associate professor suggested a global endorsement of international standards for cryptocurrencies, for example the Financial Stability Board's recommendations, could pave the way to a universal solution to the concerns of the Nigerian authorities and regulators worldwide, furnishing a coherent and standardized way of regulating crypto asset activities.
Published At
6/8/2024 12:38:59 PM
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