The Nigerian government is taking further steps to regulate the cryptocurrency sector, with the latest move focusing on managing peer-to-peer (P2P) trading within the country.
Specifically, through the country’s Securities Exchange Commission, the government is reportedly considering suspending P2P trading after a scheduled meeting on May 6, local media outlet Punch reported on May 5.
The move to regulate the $56.7 billion P2P market comes amid growing concerns about the potential use of cryptocurrencies to facilitate illicit activities and the possible devaluation of the local currency, the naira.
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According to the publication, the suspension may be temporary, intended to allow the government to establish a comprehensive set of rules. Sources familiar with the matter indicated that authorities may engage with crypto sector players to develop the regulations.
“The newly appointed Director General of the Nigeria Securities and Exchange Commission has proposed an industry-wide meeting with the Nigeria blockchain community. The meeting will be facilitated by the Blockchain Industry Coordinating Committee of Nigeria,” said the Blockchain Industry Coordinating Committee of Nigeria (BICCoN).
Need for crypto rules clarity
Interestingly, crypto stakeholders hope the meeting will clarify the sector’s rules. For instance, the President of the Stakeholders in Blockchain Technology Association of Nigeria, Obinna Iwuno, noted that they hope to finally get clarity.
“There is a whole lot going on. It is not just clear the direction as we speak, but hopefully, on Monday, we will get to have a position,” Iwuno said.
The Nigerian central bank had hinted at possible trade regulation following the institution’s decision to bar major fintech firms from onboarding new customers as part of an ongoing audit of their Know-Your-Customer (KYC) process.
Notably, at least three prominent fintech startups—Moniepoint, Paga, and Palmpay— opted to block accounts engaged in crypto transactions and report such activities to law enforcement authorities.
Role of crypto in Nigeria
Overall, this development could be a setback for cryptocurrency traders in Nigeria, estimated to number 33.4 million. Many rely on trading as a source of income in Africa’s most populous country.
It’s worth noting that many Nigerians have turned to cryptocurrencies partly as a hedge against the devaluation of the local currency, the naira.
As reported by Finbold, the Nigerian naira has continued its downward trend against the United States dollar, reaching a new record low due to foreign currency shortages.
