In a significant regulatory shift, Nigeria has announced plans to prohibit person-to-person (P2P) cryptocurrency trading in the Nigerian naira, aiming to safeguard its local currency from further depreciation and market manipulation.
New regulations on the horizon for the crypto sector
Emomotimi Agama, the Director General of Nigeria’s Securities and Exchange Commission (SEC), disclosed during a meeting with fintech professionals that new regulations targeted at crypto exchanges, digital asset custodians, and other sectors of the cryptocurrency industry would be introduced shortly.
These measures are part of a broader effort to delist the naira from P2P cryptocurrency exchanges and are expected to roll out “in the coming days.”
Impact on local and global crypto operations
The upcoming regulatory changes come amid growing concerns over the impact of cryptocurrency on the naira’s exchange rate.
The SEC’s move follows a series of actions against major players in the cryptocurrency market, including a local ban on the global exchange Binance and the arrest of its executives, Tigran Gambaryan and Nadeem Anjarwalla, earlier in February 2024.
Gambaryan is currently held at the Kuje correctional center in Abuja and faces charges including tax evasion, currency speculation, and money laundering, with his trial set to commence this month.
Broader implications for Nigeria’s economy
The decision to tighten controls over cryptocurrency transactions reflects the Nigerian government’s intent to stabilize the naira, which has suffered from significant volatility amid widespread adoption of digital currencies in the country.
By restricting the use of the naira in P2P exchanges, authorities aim to curb speculative activities that they believe contribute to currency manipulation and economic instability.
This policy shift underscores the challenges and complexities of integrating emerging digital financial technologies with traditional economic models and regulatory frameworks.
As Nigeria navigates these changes, the global cryptocurrency community and local fintech professionals will be closely monitoring the impact of these new regulations on the market dynamics and the broader economy.
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