Nigeria seeks to advance digital asset trading in the country, but like some countries in Asia, it is drawing a distinction between digital assets — which can be broadly defined and may include central bank digital currencies (CBDCs), non-fungible tokens (NFTs) and privately issued stablecoins — and cryptocurrencies, according to a Bloomberg report.

See related article: Middle East & North Africa lead crypto adoption driven by inflation, remittance payments: Chainalysis

Fast facts

  • Lamido Yuguda, Director-General of the Nigerian Securities and Exchange Commission (SEC), joins other regulators including those in South Korea seeking to clarify the distinction between digital assets and virtual or cryptocurrencies.
  • Yuguda said the country will promote investment in “sensible digital assets” with investment protection — without offering specifics. The SEC will also explore blockchain technology to advance virtual and traditional investment products, the Bloomberg story said.
  • He added the commission is sidestepping digital currencies for now, Bloomberg reported. Cryptocurrencies are not explicitly banned in Nigeria, although the Central Bank of Nigeria has instructed banks to not engage in or with entities involved with cryptocurrencies and to close the accounts of those involved in crypto transactions.
  • Yet Nigerians are globally the most curious about cryptocurrencies, as per a study done by CoinGecko, and are also among the most prolific crypto users. But the IMF has said Africa’s growing crypto markets need better regulation, and the widespread use of crypto could undermine monetary policy effectiveness and threaten macroeconomic stability.
  • Nigeria has been at the forefront of CBDC innovation as it became the first African nation to launch its own CBDC, the eNaira, back in October 2021. 
  • The Nigerian regulator joins Singaporean, Hong Kong and South Korean market regulators in trying to define what assets fall under the term “digital asset.” As per the Monetary Authority of Singapore, a digital asset is “anything of value whose ownership is represented in a digital or computerized form,” and it is referred to as crypto assets when deployed on the blockchain. The Hong Kong Securities and Futures Commission (SFC) uses “virtual assets” to cover digital representations of value which may be in the form of digital tokens, virtual commodities, crypto assets or other assets of essentially the same nature.
  • See related article: Bitcoin officially legal tender in Central African Republic