Amidst all of the crypto failings left and right this winter, there seems to be one new bright and shining star. And in one of the places, you would least expect to be pioneering in the field of crypto: Nigeria.
The African nation known for its rich cuisine and bright traditions is in the world’s spotlight for a new reason, and we couldn’t be happier about it over here in crypto land.
What exactly is happening? And will Nigeria be receiving support from the rest of the crypto nations like El Salvador?
It’s All About Recognizing Bitcoin as Legal Capital
According to a local newspaper, Babangida Ibrahim, chairman of the House of Representatives Committee on Capital Markets and Institutions of Nigeria, disclosed details about the new law that seeks to amend the existing “Investment and Securities Act 2007” to recognize Bitcoin as legal capital for investment.
Once the bill is signed into law, Nigeria’s Securities and Exchange Commission will recognize cryptocurrency and other digital funds as capital for investment. In a statement, Ibrahim emphasized the need for an efficient and vibrant capital market in the country, for which being up to-date with global practices is a necessity.
“In recent times, there are a lot of changes within the capital market, especially with the introduction of digital currencies, commodity exchanges, and so many other things that are essential, that need to be captured in the new Act. As I said, it is better to talk about this after consideration of the reports.”
The development comes almost two years after Nigeria’s central bank banned banks from servicing crypto exchanges. The notice from CBN also mandated banks to cease the accounts of any individuals or entities involved in crypto trading activities.
Bitcoin Has Thrived Despite Central Bank’s Ban
Despite the ban, Nigeria has emerged as one of the world’s fastest-growing Bitcoin adopters. It has 50% monthly active adult crypto traders, the highest in the world as per a recent report by global research firm Morning Consult.
The growing appetite for the asset class comes amidst a crashing Naira, with Bitcoin and stablecoins holding more preference for many Nigerians who want to protect their wealth. More recently, Nigerian authorities partnered with crypto exchange Binance to develop a digital economic zone focused on crypto and blockchain-related businesses.
A year after launching its own central bank digital currency, eNaira, Nigeria announced limits on cash withdrawals. This is a bid to drive the adoption of alternative payments, a move that is expected to affect more than 200 million people.
CBN imposed new limits on over-the-counter withdrawals at just $225 per week for individuals and $1,123 for businesses.
The African nation’s cashless policy also entails capping ATM cash out at $45 per day, with only $0.45 notes and smaller denominations being available from the machines. Meanwhile, customers will still be able to withdraw larger sums in some instances but will be levied a processing fee of between 5% and 10%.
What Does the Future Hold for Nigeria?
Could this be the impetus that the African continent needs in order to fast-track its development? A similar focus on financial services has historically transformed developing nations.
Look no further than the host of the World Cup, Qatar. Only a few decades ago it was a small island state. Because of its diversification of investment and entry into the financial services industry, the country was able to host one of the largest events in human history. Let’s hope Nigeria can do the same one day.
