Central Bank of Nigeria Working on Crypto Regulations, Including Stablecoins and ICOs

According to a recent paper from the Central Bank of Nigeria, the bank is focusing on creating a regulatory framework for stablecoin implementations, as well as digital tokens issued through initial coin offerings (ICOs). The document suggests that such stablecoin implementations could be a successful payment method.

“A successful payment method”

In its recently released Payment System Vision 2025 document, the Central Bank of Nigeria (CBN) stated that the bank will be open to developing “a regulatory framework for [the] potential stablecoin implementations.” The document states that such stablecoin implementations are likely to “be a payment system that is successful” and thus there is “a need to develop a regulatory framework to allow such implementation.”

The Nigerian Payment System Vision 2025 document also talks about creating a framework to regulate initial coins offerings (ICOs). While acknowledging the important role ICOs play in fundraising, the document warns that regulation is required if investor interest is to be rekindled.

“There is little appetite to adopt the current ICO round given its lack of regulation. However, given the role of ICOs as an asset class, there is potential to adopt ICO technology as a new approach to raising funds for capital projects (in the wholesale market) or peer-to-peer lending or crowdfunding (for the retail market).” The document says.

The document states that ICOs may become a reality if a regulatory framework is properly implemented and supported, opening “a new way to attract foreign direct investment (FDI) and raise capital.”

Regulation Offerings of Initial Coins

While the CBN used to discourage or prevent financial institutions from accepting transactions involving cryptocurrency, the latest payment system document suggests that the central bank’s attitude towards private-issued digital currencies has changed.

After CBN directed banks to cease extending services to cryptocurrency entities in February 2021, some Nigerian commentators accused the central bank of usurping power from the Nigerian Securities And Exchange Commission (NSEC). However, the document states that the CBN will regulate digital currency spaces jointly with NSEC.

“[The] CBN would have a role in the payment aspect, but the SEC would have to provide a regulatory framework as tokens would be a new asset class,” The document says.

Sign up to receive a weekly overview of African news straight to your inbox

What are your thoughts on this story? Please let us know your opinion in the comments section below.