Nigeria is reportedly looking to pass a bill, recognizing the use of Bitcoin and other crypto assets as legal tender for transactions.
Nigeria’s Chairman of the House of Representatives Committee on Capital Market and Institutions, Babangida Ibrahim, revealed despite the country banning cryptos in February 2021, it will soon pass a law legalizing the use of Bitcoin and other cryptocurrencies, the Punch reported Sunday.
The proposed law would be an amendment to the Investments and Securities Act, 2007 Bill, which when passed and signed into law, will allow the country’s regulator Securities and Exchange Commission, and the Central Bank of Nigeria (CBN) to recognize cryptos as capital for investment.
Ibrahim noted, “Nigeria must flow with global economic innovations… For us to do that, we have to be up-to-date global practices.”
“In recent times, 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,” he further said.
No timeline was provided for the passing of the bill.
When asked about the country’s initial ban on Bitcoin and other digital assets, Ibrahim said many investors were actively using cryptos, but not local accounts to transact.
“They are digital. That is why – if you remember – when cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them. All these are some of the issues that we have considered we have to regulate them,” Ibrahim added.
He clarified it was not that cryptos were illegal, but that the asset class lacked regulation.
“It is not about 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 Nigerian government has been keen on pushing for a cashless policy, in a bid to drive adoption for its central bank digital currency (CBDC) – eNaira. However, per a Bloomberg report in October, only less than 0.5% of the crypto-savvy population in the African nation are using the government-backed crypto, after its launch in 2021.
Nigeria’s push to legalize cryptos comes after the nation’s central bank imposed limits on cash withdrawals, over the counter or through ATMs, on Dec. 6 in a move to increase the adoption of eNaira.
“Customers should be encouraged to use alternative channels — Internet banking, mobile banking apps, USSD, cards, POS, eNaira to conduct their banking transactions,” the central bank said in the press release.
In April 2022, the Central African Republic became the first African nation and second in the world to embrace Bitcoin as a legal tender. El Salvador was the first to announce a law to legalize cryptos in September 2021, allowing consumers to use Bitcoin and other cryptos in all transactions.
