Legal Recognition Of Bitcoin Expected In Nigeria Soon

E-Naira’s Failure Advocates In Favor of Bitcoin

It hasn’t been long ago when the Central Bank of Nigeria (CBN) officially launched e-Naira i.e. Central Bank Digital Currency (CBDC).

Exactly it was in October 2021, when e-Naira surfaced at the national level to be embraced by Nigerians. However, since the launch to date, the e-Naira hasn’t been able to attract attention as CBN had expected initially.

Since October 2021, e-Naira has been adopted by locals with a percentage not exceeding 0.5%. It seems as if CBN has already lost hope of mass adoption of the e-Naira or that it may be trying to accelerate the adoption.

It is possible that out of the two scenarios, one or both may be correct because the Nigerian Government is considering Bitcoin.

Nigeria is among the countries that are highly interested and enthusiastic to adopt Bitcoin. Even Google has revealed on several occasions that the searches from Nigeria for Bitcoin have surpassed all other countries.

This gives a hint that the government of Nigeria may be thinking about adopting Bitcoin and altcoins. Even if they do not go for altcoins, they may definitely go for Bitcoin because it is the top choice among the locals.

Legal Recognition of Bitcoin Proposed

The Nigerian Government has come up with a plan through which it aims at legalizing and recognizing the world’s first digital coin, Bitcoin.

According to local news outlets, the Government concerned has proposed that usage of Bitcoin and other cryptocurrencies should be made legal.

The purpose behind this is to move the state side by side with the rest of the world by embracing global practices.

The Nigerian Government’s initiative was confirmed by the media in a post-news interview with Senator Babangida Ibrahim, Chairman of the Senate’s Committee on Capital Markets.

Digital Assets Accepted As ‘Investment Capital’

News item revealed that there is an amendment to the legislature titled “Investments and Securities Act, 2007” which is pending approval.

It has been further claimed in the news that if this amendment is passed, then cryptocurrencies, including Bitcoin, shall be legally recognized.

This would mean that the Securities & Exchange Commission of Nigeria shall treat digital funds, inclusive of all cryptocurrencies, as investment capital.

Senator Ibrahim also acknowledged the need which requires Nigeria to move along side-by-side with the rest of the world.

He insisted that capital markets have been evolving and expanding globally and hence Nigeria must allow its markets to evolve subsequently.

He further suggested that global practices have changed drastically and Nigeria should not wait in adopting and embracing those changes.

Crypto Ban in The Past

For many, the initiative comes rather as a surprise. This is so true because CBN, under the auspices of the Nigerian Government, was otherwise maintaining a non-lenient stance against digital assets.

This can be further proven by the 2021 ban imposed by CBN on the use of digital currencies in local exchanges.

After imposing the ban, CBN further directed the national banking sector to stop providing banking services to crypto service providers.

In these connections, bank accounts belonging to crypto exchanges and Nigerian crypto owners were shut down by the banks.

Senator Insists of No ‘U-turn’

Currently, it seems as if the Nigerian Government has taken a full u-turn from its earlier stance when it completely banned digital assets.

When being questioned about the sudden change in the Government’s policy, Senator Ibrahim responded that the initiative is not a ‘180-degree turn’.

He explained that institutions like CBN are meant for issuing policies and such policies are subject to change based on a second review.

However, he suggested that the legalization of cryptocurrencies does not automatically lift the ban. Yet, there is no harm in reviewing the legality of a thing which can form the basis of a local financial network, opined Ibrahim.

It may be noted that currently legal currencies are not legally recognized until the amendment is approved.

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