The Nigerian Senate has summoned the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele and the Director General (DG) of the Securities and Exchange Commission (SEC), Lamido Yuguda for a briefing on the status of cryptocurrency in the country.
The action would be carried out by the Senate Committees on Banking, Insurance and other Financial Institutions, ICT and Cybercrimes, and the Capital Market.
It states that the information from this briefing would help it “determine the opportunities and threats of cryptocurrencies on the nations’ economy and security.”.
On February 11, 2021, Senator Istifanus Dung Gyang of Plateau North and Senator Adetokumbo Mukhail Abiru of Lagos East opened the motion at the Senate floor, referencing the CBN’s action to deny crypto exchanges access to banking and other financial services, and the reasons they gave.
Contrary to the CBN’s order, the SEC released a statement where it recognised cryptocurrency as securities that will be registered with the commission. For the capital markets regulator, crypto will be treated as securities, until the entity offering it proves otherwise.
The members of the Senate treated the issue positively, highlighting both the positive and negative parts of cryptocurrency.
“The last five years, we have had people changing cryptocurrencies to over 500 million dollars. It is good to ban because of the challenges it has presented; in reality, banning it doesn’t take it away,” said Abiru.
He argued that since the SEC recognises crypto as a financial asset they need to regulate, the Senate should also invite major stakeholders to a public hearing.
Senator Abiru’s stance echoes the sentiments of major stakeholders we’ve talked to in previous years, who insisted that any form of crypto regulation should be done with such engagement. The absence of this gives room for shadow markets and P2P platforms to flourish.
Senator Solomon Adeola of Lagos West Senatorial district pushes this even further.
“I am strongly against the outright ban of this medium of exchange by the Central Bank of Nigeria (CBN). What the CBN should be telling Nigerians are the regulations put in place to regulate the activities of the operators.”
“All over the world, these cryptocurrencies are regulated. The operators of this so-called currency are everywhere,” Adeola maintained.
While others like Senator Sani Musa of Niger West cited with the difficulties of regulating crypto, Senator Biodun Olujimi of Ekiti South believes crypto could work to Nigeria’s advantage.
“We didn’t create Cryptocurrency and so we cannot kill it and cannot also refuse to ensure it works for us. These children are doing great business with it and they are getting results and Nigeria cannot immune itself from this sort of business,” Olujimi said.
“What we can do is ensure bad people must not use it. This motion is most important to us. The time has come for us to harmonize all the issues concerning cryptocurrency.”
Olujimi’s position further points to the clear conflict between the CBN’s and the SEC’s stance. With this in mind, the leaders of both regulators have been summoned for a hearing.
Following the CBN’s order, some Nigerian banks have begun closing crypto traders’ accounts, and they’ve been finding different ways to cope with the situation. Local exchanges are working on alternative deposit and withdrawal platforms, and P2P integrations.
Given the comments from the Senate floor, there could be a lifeline for a return to normalcy for honest traders and exchanges alike.