The Nigerian Securities and Exchange Commission (SEC) has revealed plans to review its regulatory framework to accommodate crypto trading and digital transactions under a taxed framework. This is in a bid to attract extra sources of revenue for the country.
Nigerian SEC Eyes Crypto-Based Revenue
In an email response to inquiries, the SEC disclosed that it foresees the potential for crypto transactions to generate considerable income. Still, it refrained from stating the aggregate sum expected in revenue.
Reviewing the country’s crypto transactions framework, the regulatory body reassures crypto-savvy Nigerian youths of a secure transaction experience and a broader crypto licensing scope, including a formal transaction exchange where traders’ funds can be monitored under a new tax framework. The SEC said:
“We will ensure that all eligible transactions on regulated exchanges are brought under the tax net.”
The African nation has not viewed the crypto market favorably for many years. In particular, crypto exchanges have had to deal with regulatory hurdles from the financial watchdog. While exchanges like KuCoin resorted to introducing transaction taxes, others like OKX have officially ceased operations in Nigeria.
Nigeria Leans Forward to Embrace Crypto
After years of hostility towards crypto assets and exchanges, Nigeria, in August 2024, eventually raised optimism for crypto firms and crypto adoption by approving two crypto trading platforms, Quidax and Busha, to commence operations under the country’s Accelerated Regulatory Incubation Programme (ARIP).
The SEC’s approval covered four crypto asset trading platforms and one cryptocurrency custodian, but under an “Approval-in-Principle,” which connotes not a full license but a partial license.
Leaning toward a crypto-friendly outlook after years of hostility is not peculiar to Nigeria. In the past, Ghana held that cryptocurrency users did so at their own risk because crypto assets are not recognized as legal tender or protected under government regulations. However, it now embraces the asset class with a regulatory guideline to serve as a guardrail for crypto adoption in the country.
