Report: Nigerian Lawmakers Set to Pass Law That Diminishes Central Bank Influence on Crypto

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Nigeria is expected to designate cryptocurrency as capital for investment if the country’s House of Representatives votes to approve a bill that seeks to amend the Investments and Securities Act of 2007, a report has said. A Nigerian lawmaker, Babangida Ibrahim, suggested that the Central Bank of Nigeria (CBN) is not well positioned to regulate cryptocurrencies.

The CBN and SEC Feud

The Nigerian House of Representatives is expected to pass a bill that seeks to give the country’s securities regulator the right to designate cryptocurrency as capital for investment, a report has said. The bill, which seeks to amend the Investments and Securities Act of 2007, reportedly clarifies the roles of Nigeria’s two regulators that have jostled to control the crypto industry.

As previously reported by Bitcoin.com News, the Central Bank of Nigeria (CBN) seemingly assumed crypto control after directing financial institutions to block crypto entities. The CBN’s Feb. 5 directive was issued just a few months after the Nigerian Securities and Exchange Commission (NSEC) designated crypto assets securities.

Following the CBN’s abrupt decision, the Nigerian securities regulator said the guidelines that it had issued in September 2020 would be suspended. The NSEC also promised to engage the CBN over the matter.

Central Bank Not Well-Positioned to Regulate Crypto

Explaining why Nigeria needs to regulate digital currencies, Babangida Ibrahim, the chairperson of the legislative body’s Committee on Capital Market and Institutions, said:

We need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices. In recent time[s], there are a lot of changes within the capital market, especially with the introduction of digital currencies, commodity exchanges and so many other things that are essential, that need to be captured in the new Act.

Concerning the CBN’s directive and the central bank’s attempts to consolidate its control of the crypto industry, Ibrahim said the apex bank is not ideally placed to regulate cryptocurrencies because many digital currency investors “don’t even use local accounts.” According to Ibrahim, this situation justifies the legislative body’s plan to amend the Securities Act.

Also, in his remarks during an interview with Punch Nigeria, the lawmaker said the objective of the House of Representatives is not to take sides but to follow the law.

“It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria. The CBN is regulating financial markets and the Securities Exchange Commission regulates the capital market,” Ibrahim reportedly said.

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