Nigeria’s Senate Committee on Capital Markets is urging the government to embrace cryptocurrency regulation, arguing it could benefit the local currency, the Naira. This comes amidst the country’s ongoing struggle with its stance on digital assets.

Regulation: A Logical Step to Protect and Profit

Committee chairman, Osita Izunaso, highlighted the growing number of Nigerians already actively trading crypto. He believes regulation is the most practical approach, acknowledging the current inability to completely halt crypto activity. A report cites Izunaso’s remarks following a meeting with Emomotimi Agama, the newly appointed head of the Nigerian Securities and Exchange Commission (SEC).

Nigeria’s Inconsistent Approach to Crypto

Izunaso expressed concern that Nigeria’s unclear position on crypto could be hindering its economic potential. The country boasts a sizable crypto market, but has lacked a cohesive policy. This inconsistency was evident in the contrasting stances of the Central Bank of Nigeria (CBN) and the SEC. While the SEC has shown openness to regulating crypto, the CBN previously took steps to restrict its growth.

Shifting Tides: CBN’s Softer Stance

The departure of former CBN governor, Godwin Emefiele, seemingly led to a shift in the bank’s approach. The controversial February 5th directive targeting crypto transactions was ultimately rescinded. However, a resurgence of Naira depreciation earlier in 2024 saw authorities crack down on suspected currency manipulation involving crypto exchanges like Binance.

Restrictions and Accusations Don’t Stop Interest

Despite these measures, Nigeria remains a global leader in Bitcoin interest. This reality is prompting the Senate committee to advocate for market development. Izunaso believes a robust capital and crypto market could strengthen the Naira. “That’s what’s crushing the Naira… If we develop our capital market and develop our crypto market, we will bring more liquidity into the system,” he stated.

New SEC Head Vows Innovation Focus

Emomotimi Agama, known for his pro-innovation stance, has pledged to revitalize the Nigerian capital market and create a new narrative. He assures the introduction of innovative programs fostering the growth of world-class companies.

Nigeria’s relationship with cryptocurrency is in flux. While the Senate Committee pushes for regulation and market development, the path forward remains to be seen.