“Nigeria Payments System Vision 2025” Proposal
A document containing digital assets regulation proposal has surfaced in Nigeria which has been furnished by the Central Bank of Nigeria (CBN).
The document titled “Nigeria Payments System Vision 2025” concerns the regulatory framework pertaining to Initial Coin Offerings (ICOs) and stablecoins.
CBN’s document proposes laying down of regulatory framework which would be implemented upon ICOs and stablecoins.
Potential of Stablecoins and ICOs Needs To Be Unearthed
Most importantly, the document also proposes using of stablecoins for attracting Foreign Direct Investment (FDI) into the country.
The document hence acknowledges the potential lying in stablecoins which can have a direct positive impact on the national economy.
In the document, CBN has claimed that stablecoin could become a worthwhile payment mechanism in the country.
CBN then suggested that for unearthing that potential, the development of an efficient and robust regulatory framework is not only essential but a must.
ICO Specific Regulation Proposal
Apart from proposing stablecoin regulation, CBN’s document also talked about developing a framework specifically for ICOs.
The document also took note of the important role of ICOs as a credible source of funding raising. CBN then suggested that a regulatory framework is necessary if investors’ confidence in ICOs is reinstated.
CBN further suggested that because the regulations with regard to ICOs are missing, hence, their adoption is not as it should be.
It was then advised by CBN in the document that ICOs may need to be classified and defined as ‘assets’. After their classification, their adoption can hence be boosted to a great extent, opined CBN.
ICO A Credible Source of Attracting FDI
CBN also acknowledged that ICOs can play a crucial role in capital projects, retail markets, and peer-to-peer lending or funding-raising campaigns.
It was hence expressed that after laying down the ICOs regulatory framework, ICOs can then bring in FDI and help raise funds as capital.
CBN’s Discouraging Stance In Past
CBN had long maintained its discouraging stance towards crypto as well as the stablecoins and ICOs. However, CBN’s latest document namely “Nigeria Payments System Vision 2025” seems to be encouraging them altogether.
In particular, the document shows that CBN has departed from its discouraging stance maintained against crypto, stablecoins, and other privately issued digital coins.
Otherwise, crypto has had a long history of being treated badly by CBN. Even the cryptocurrencies were meted with severe consequences by CBN in February 2021.
At that time, CBN had issued an omnibus kind of order to be implemented by all the banks in the country. Through the order, the banks were debarred from offering services to clients with crypto backgrounds and profiles.
This action then drew criticism towards CBN which was accused by many Nigerian experts of misusing its power and authority.
Regulation by CBN and SEC
CBN was also criticized for usurping and wielding the power vested exclusively in the Nigerian Securities & Exchange Commission (SEC).
It has now been proposed that for regulating ICOs and stablecoins, both CBN and SEC should work together in regulating this space.
While CBN would look after the aspects pertaining to payments but on the other hand SEC has been tasked to draft the required regulations.
However, the document is in a proposal form and needs the premier’s approval and cannot become a law until the Parliament passes it.
It is to be seen whether Nigeria would be able to tap the potential lies in ICOs and stablecoins. The authorities will look into the new bill and see what it has to offer.
If things do seem to be falling in line with Nigerian regulations and rules, then the parliament may decide in favor of the proposal.
Until then, the entire cryptocurrency sector in the country has to keep its fingers crossed and hope for the best. If the proposal gets approved, it will be made into a law, giving legal status to ICOs and stablecoins.