Nigerian Government Greenlights Its National Blockchain Policy To Support A Digital Economy3-mins read

Ali Raza

Ali Raza |  Updated on 13/5/2023

The Nigerian government has approved its national blockchain policy. This policy is part of the effort made by the country to shift its operations towards a digital economy. Nigeria is the largest crypto-asset economy in Africa with the country also launching a central bank digital currency (CBDC) but the adoption remains significantly low.

Nigeria: A Growing Hub for Blockchain?

Nigeria has been making significant strides in its efforts to establish a digitally-based economy, as the country recognizes the potential for technology to spur growth and development. In recent years, the government has implemented several initiatives aimed at promoting digital inclusion, including the National Broadband Plan and the Digital Nigeria project. These programs seek to increase internet access and digital literacy, while also supporting the growth of Nigeria’s tech industry. With a keen eye on job creation, improved efficiency in business processes, and increased access to services and information for its citizens, Nigeria’s push towards a digitally-based economy is gaining momentum and generating excitement across the country.

A tweet by the Federal Ministry of Communications and Digital Economy confirmed that it had formulated this policy. The ministry said the policy aimed to cultivate a blockchain-powered economy supporting secure transactions and enabling a seamless exchange between businesses, people, and government. To quote the Ministry itself;

“The vision of the Policy is to create a Blockchain-powered economy that supports secure transactions, data sharing, and value exchange between people, businesses, and Government, thereby enhancing innovation, trust, growth, and prosperity for all.”

The tweet made by the ministry has not mentioned cryptocurrencies as of yet. The Nigerian government cracked down on the cryptocurrency industry in 2021. At the time, Nigeria was ranked among the fastest-growing countries globally regarding digital asset adoption.

The Nigerian cabinet, popularly known as the Federal Executive Council, has directed regulators in the country, including the Central Bank of Nigeria and the Securities and Exchange Commission (SEC), to create regulatory instruments needed for deploying blockchain technology across different sectors of the economy.

Nigeria’s SEC To Permit Tokenized Coin Offerings

This development comes amid a report by Bloomberg saying that the Nigerian SEC was considering the possibility of enabling tokenized coin offerings backed by financial instruments such as debt, equity, and property. However, the regulator said the financial assets did not include cryptocurrencies on licensed cryptocurrency exchanges.

The head of securities and investment services at the Abuja-based commission, Abdulkadir Abbas, said its goal was to commence with a simple and clear proposal before expanding into the complex processes.

The regulator is also processing the applications made by crypto exchanges that want to operate in the country. Such platforms will start their operations on a trial basis, after which they will be subject to a regulatory incubation period of one year. This incubation period will include limited service and SEC monitoring to determine the suitability of companies to provide financial services.

Abbas said determining whether a firm should be registered to offer services in the country will be done by the tenth month. Abbas also said that if a determination to register a company is not reached, the regulator could extend the incubation period or even ask the company to halt operations.

The report made by the regulator said that the SEC would not start registering cryptocurrency exchanges until it reached an agreement with the country’s central bank. The regulator ordered local financial institutions to stop interacting with crypto service providers. Before the central bank doubled down on the restrictive policies, Nigeria was among the fastest adopters of cryptocurrencies in the country.

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