Nigerian Senate Invites Financial Regulators To Discuss Crypto Ban

  • The Central Bank of Nigeria (CBN) banned cryptocurrencies last week, causing a national uproar.
  • For now, the country’s crypto industry remains active, with firms circumventing the regulator’s ban.
  • Regulators in the Federal Republic of Nigeria shocked local crypto industry players and enthusiasts last week as they clamped down on cryptocurrencies.
  • Lawmakers are now looking to get additional clarity on the motives for this action and how best to move forward.

An Outright Ban Won’t Solve Much

Nigerian lawmakers have summoned the country's Central Bank Governor and the head of the Securities and Exchange Commission, Nigerian Tribune reports.

The decision came following a session concerning the recent crypto ban that was announced by the Central Bank last week. The regulator had instructed banks and non-banking financial institutions to stop serving individuals or companies transacting with cryptocurrencies.

The Central Bank’s decision immediately caused an uproar across Nigeria. #Crypto became the top trending hashtag in the country’s Twitter feed, with tens of thousands voicing their frustrations over the restrictions. Crypto-facing companies were also put into a dilemma as the ban took them by surprise, and their access to banking services was immediately cut off.

Speaking on the impacts of the bank, several lawmakers voiced discontent with the Central Bank’s policies. In their session on the topic earlier today, many explained that, while crypto assets needed regulation, an outright ban would solve little.

Senator Solomon Adeola, a representative of the Lagos West Senatorial District, said at the hearing that, the Central Bank and other securities agencies should focus primarily on building effective regulations. In part, he added:

“All over the world, these cryptocurrencies are regulated. The operators of this so-called currency are everywhere. I would indulge this Senate to allow the regulators also to be invited so that they can also tell the Committees their own position concerning the operation of cryptocurrency in Nigeria.”

His colleague from the same state, Sen. Tokunbo Abiru, challenged the Central Bank’s motive for the ban, explaining that outlawing cryptocurrencies won’t stop illegal activities like internet fraud and money laundering in the country. Like Adeola, Abiru asked for progressive regulations instead, calling on regulators to dialogue with local industry leaders to work out a proper regulatory regimen.

Workarounds as Usual

While deliberations are still being set, the Nigerian crypto industry appears to be bouncing back from last week’s shock. Binance, which had to suspend deposits in the country’s Naira fiat currency days ago, announced yesterday that it had launched peer-to-peer Naira trading on its platform.

The feature, dubbed “Express Mode,” will allow trading in a regulated and security-compliant manner. Most importantly, it enables Nigerians to continue accessing cryptocurrencies.

Top exchange BuyCoins Africa also launched a new deposit and withdrawal channel, ensuring that users can move their funds from their accounts with ease. Several other exchanges have announced plans to work around the ban, ensuring that Nigeria, Africa’s most prominent cryptocurrency market, doesn’t fall behind the curve.

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