Nigeria has issued new rules for digital assets, providing greater clarity on cryptocurrency trading in Africa’s most populous country. The new regulation establishes roles for various players in the digital asset space, with each playing an important role in the new industry.
Nigeria implements crypto asset rules which are expected to boost trade
The Securities and Exchange Commission (SEC) announced on its website the publication of rules on the issuance, offering platforms, and possession of virtual currencies for virtual technologies. This categorizes the assets as SEC-regulated securities.
The rules may encourage trading by providing more insight on the industry in a country that is already one of the biggest economies for cryptoassets. According to Paxful, a crypto marketplace, Nigeria has the highest volume of virtual currencies outside of the United States.
Digital Asset Offering Platforms (DAOPs), Digital Asset Custodians (DACs), Virtual Asset Service Providers (VASPs), and Digital Asset Exchanges (DAXs) are now among the Digital Asset Players.
The regulations apply to all systems that facilitate the buying and selling, barter, and transfer of crypto assets. All virtual currency issuers and funders, including international and non-residential lending institutions and funding agencies; and any integrator that assertively impacts Nigerian shareholders.
The SEC’s stance contrasts sharply with that of the Central Bank of Nigeria (CBN), that presently prohibits local banking firms from doing business with cryptocurrency-related businesses. Notably, the new SEC rules necessitate the establishment of trust accounts with receiving banks by coin issuing channels and marketplaces.
Generally speaking, this development may add credibility to crypto and other related businesses, ultimately opening up new avenues for virtual currencies utilization in the country, which is one of the world’s leading countries for crypto adoption. The Regulator’s guidelines might provide the Central bank with a foundation wherein the country’s banking institutions can interact with cryptocurrency.
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