This is an opinion editorial by Heritage Falodun, a bitcoin consultant and computer scientist based in Nigeria.
During a Federal Executive Council meeting chaired by President Muhammadu Buhari at the Council Room in Abuja on May 3, 2023, Nigerian government approves official use of blockchain technology in the country,
Nigeria’s Minister of Communications and Digital Economy, Professor Ali Isa Pantami, Unveils Official Approval of “National Blockchain Policy for Nigeria” stating that “The new policy was a product of consultation with 56 institutions and individuals with the ultimate goal of institutionalizing blockchain technology in Nigeria’s economy and security sectors.”
Nigeria’s History With Bitcoin Regulation
A deeper dive into understanding the Nigerian government’s disposition towards blockchain-dependent innovations over the past few years will paint a clearer picture of how significant and important this recent policy and federal approval is for the bitcoin space in Nigeria and Africa.
The Central Bank of Nigeria (CBN) on January 12, 2017 issued a circular which warned financial institutions and the general public about the risks associated with blockchain-dependent technologies such as bitcoin. Based on that previous warning and instruction, the Central Bank of Nigeria on February 5, 2021 Officially banned banks from facilitating any bitcoin- and crypto-related transactions By re-issuing the circular – a ban that remains unchanged at the time of writing.
This restrictive policy comes at a time when the adoption of bitcoin and shitcoin related activities was on the rise in Nigeria, and it was a ban Further promoted the use of bitcoin and stable coins As users grapple with financial restrictions, users are increasingly discovering the power of decentralized bitcoin innovations such as peer-to-peer (P2P) marketplaces.
In the midst of all these immediate regulatory measures, CBN was apparently busy creating what it perceived as an alternative to shitcoins: a government-controlled digital currency called e-naira, which officially launched On October 25, 2021, apparently built on a centralized system, not a decentralized blockchain like bitcoin. Meanwhile, the Security and Exchange Commission (SEC) of Nigeria was taken over Creating a policy framework for token-issuing platforms and exchanges,
All these regulatory changes were not unrelated to the government’s awareness of how much the blockchain industry is flourishing in Africa’s most populous country.
What does this mean for bitcoin in Nigeria?
At this point, one would naturally ask what another regulatory update to the national blockchain policy means for bitcoin.
A quick but detailed response would be: This is certainly a welcome development for bitcoin advocates in the country and possibly one of many steps we could see in the right direction.
From my interpretation, this policy is more focused on giving direct government oversight to relevant regulatory bodies such as National Information Technology Development Agency (NITDA), CBN, SEC, The Nigerian Communications Commission (NCC) and National University Commission (NUC), among many others, is now hoping to develop a more detailed regulatory framework using blockchain-based innovations such as bitcoin. Governments are moving from being completely repulsive or hostile to bitcoin-, blockchain- and crypto-related activities to now accepting them by default and creating a regulatory environment to thrive.
While altcoins and other developments and products dependent on the blockchain excluding bitcoin still stand a chance to remain regulated and subject to the directives of these upcoming regulations, bitcoin uniquely defers such regulations.
As a stakeholder in the African bitcoin space, I must admit that consistent clarity from governments will not only aid adoption but also create an enabling environment for Nigerians to incorporate decentralized blockchain technology, such as bitcoin, into their businesses. Enhancing businesses and ways of life, while opening up many legal opportunities for all.
As Nigeria’s President-elect Bola Tinubu has promised, keep an eye on the space as the industry takes shape To enable judicious use of blockchain technology and cryptocurrencies in the banking and financial sector of the country, My fingers are crossed until we see full implementation of bitcoin-friendly regulations in Nigeria.
This is a guest post by Heritage Falodun. The opinions expressed are solely his own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.