Nigerian Lawmakers Approaching Law to Minimize Central Bank Control over Bitcoin

Nigeria is now considering a change in the law that would potentially allow the use of cryptocurrency as an investment option. The House of Representatives is expected to vote on a bill to change the Securities Investment Act of 2007, based on a survey. Nigerian legislator Babangida Ibrahim has suggested that the Central Bank of Nigeria (CBN) is not in a suitable position to regulate cryptocurrencies.

The SEC and CBN are at odds

The Nigerian House of Representatives has proposed a bill that would permit the country’s securities regulator to classify cryptocurrencies as capital for investment. The intention of the bill is to modify the Securities Investment Act of 2007 and clarify the roles of both the Central Bank of Nigeria and the Nigerian Securities Exchange Commission (NSEC). There have been clashes between regulators with regards to controlling the cryptocurrency industry.

Per previous reports by Bitcoin.com News, the Central Bank of Nigeria issued five directives within a few months of its initial statement, after financial institutions had been instructed to block crypto entities. This appears to have given the CBN power over the crypto market. The Nigerian Securities Exchange Commission argued that the guidelines they had launched in September 2020 would be terminated and that they would work with the CBN to resolve the matter.

Central bank not well-equipped to regulate cryptocurrencies

Explaining why digital currencies need to be regulated, Babangida Ibrahim, Chair of the Capital Markets Institutions Committee of the legislative body, said:

We need a dynamic and efficient capital market in Nigeria. To do this, we must stay up to date with global practices. Many changes are taking place in the capital markets, particularly with the introduction of digital currencies and commodity trading. Law.

With reference to the CBN directive and the central bank’s attempt to gain control of the cryptocurrency industry, Ibrahim noted that the main bank isn’t in an appropriate position to regulate cryptos as many digital currency traders “don’t even use local accounts.” He argued that this situation justifies the legislative body’s proposal to amend the Securities Law.

Furthermore, during an interview with Punch Nigeria, the legislator stated that the House of Representatives’ goal is not to pick sides, but to comply with the law. “It’s not about the lifting of the ban and looking at the legality: what is legal in Nigeria? The CBN regulates the financial market and the Securities Exchange Commission regulates the capital market,” Ibrahim was quoted as saying.

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