Lack of clear regulations for cryptocurrency in Nigeria risks leaving the country behind even as countries across Africa embrace blockchain technology. This is according to Femi Gbajabiamila, the speaker of the Nigerian House of Representatives.
Speaking at a visit by the Nigerian Deposit Insurance Corporation (NDIC), Gbajabiamila told Daily Post that he wants the country to come up with a legal framework for digital currencies. This, he believes is essential to regulate the use and trading of cryptocurrency in the country. It will also help to ensure that Nigeria doesn’t sit back and try to play catch-up tomorrow.
“On the issue of cryptocurrency, I think blockchain technology is novel and coming up strong. We don’t want to be left behind”
He further stated that the developments around blockchain are coming out strongly and that the world is beginning to treat blockchain with the seriousness it deserves. Gbajabiamila also wants Nigeria to take this technology more seriously. He even noted the House’s readiness to establish legal frameworks to abide by where emerging technology and assets are concerned.
Roles of NDIC
Besides cryptocurrency regulation, the lawmaker also discussed the role of the NDIC and establishing a well-defined and separate competency between it and Nigeria’s central bank. This would involve expanding the NDIC’s statutory functions and ensuring its roles did not overlap with those of the country’s central bank.
Just like the American Federal Deposit Insurance Corporation, the NDIC provides an insurance safety net for depositors in Nigeria’s recently liberalized banking sector.
Need for cryptocurrency regulations
Nigeria, like many countries around the world, does not have legal guidelines for blockchain and cryptocurrencies. Lack of a predictable legal framework for cryptocurrency results in confusion in the market, giving way for crypto-related scams and Ponzi schemes to flourish.
Early this year, Paxful Inc., a crypto company based in Estonia, was reported to the Economic Financial Crimes Commission over allegations of defrauding several of investors from Nigeria out of millions of dollars worth of cryptocurrencies. According to the details of the allegations. Paxful did this through arbitrary account closures. The company, however, subsequently denied the allegations stating that every account shut down had a valid reason for such action.
Currently, only a dozen of countries around the world have developed formed blockchain regulatory frameworks. These include Russia, Switzerland, Lithuania, China, Canada, Singapore, Australia, and the EU.