The bull rally in 2021 increased the adoption and popularity of Bitcoin and cryptocurrencies. Many countries have started to approach cryptocurrencies positively and recognize them as legal currency. A first in the world in this regard, the Central American country El Salvador accepted Bitcoin as its legal currency in September 2021. After El Salvador, Nigeria was one of the countries that took steps in this regard.
Having launched its own CBDC, eNaira, in October 2021, Nigeria is now preparing to enact legislation that will allow and regulate the use of BTC and cryptocurrencies in the country. Speaking to the country’s local news source, Punch Newspaper, Babangida Ibrahim, Chairman of the House of Representatives Capital Markets Committee, said that if the amendment is passed, it will “Allow the Local Securities and Exchange Commission (SEC) to recognize cryptocurrency and other digital funds as investment capital.”
Stating that Nigeria should be aware of global economic innovations and keep up with trends and developments, İbrahim said:
“We need an efficient and vibrant capital market in Nigeria. In order to do this, we need to have up-to-date global practices. When it comes to digital currencies, they have different names. These currencies have no limits. You can invest in them in Nigeria, the USA, Canada or anywhere else.”
Referring to the ban on cryptocurrency activity in the country in February 2021, İbrahim continued his words as follows:
“Remember, when cryptocurrency activities were first banned in Nigeria, the Central Bank of Nigeria (CBN) discovered that most of these investors didn’t even use local accounts. That is, they are not within the jurisdiction of the CBN. As they do not use local accounts, it is not possible for CBN to control them. In this context, Bitcoin and cryptocurrencies are some of the issues we think we need to regulate.”
In addition to the legal recognition of Bitcoin and cryptocurrencies in the country, the law will also define the regulatory roles of the Central Bank of Nigeria and the Nigerian Securities Exchange Commission in matters related to digital currencies. Finally, it was stated that the changes were made because the CBDCs of Nigerians showed little or no interest in eNaira.