Nigeria is considering introducing legislation to make the use of bitcoin and other cryptocurrencies legal, reversing its previous position on the sector.
A local newspaper reported that Babangida Ibrahim, the chairman of the Nigerian House of Representatives Committee on Capital Markets and Institutions, provided information regarding the proposed law that would amend the “Investment and Securities Act 2007” to recognise Bitcoin as legitimate investment capital.
The Securities and Exchange Commission of Nigeria will accept cryptocurrencies and other digital funds as investment capital once the bill becomes law. Ibrahim emphasised the need for an effective and dynamic capital market in the nation, for which keeping abreast of international best practises is a requirement, in a statement.
“The capital market has undergone a lot of changes recently, particularly with the introduction of digital currencies, commodity exchanges, and numerous other essential developments that must be reflected in the new Act. As I previously stated, it is preferable to discuss this after taking the reports into account.
The change occurs nearly two years after Nigeria’s central bank forbade banks from providing services to cryptocurrency exchanges. The CBN’s notice ordered banks to close the accounts of any people or organisations engaged in cryptocurrency trading.
Nigeria has become one of the Bitcoin adopters with the fastest rate of growth worldwide despite the ban. According to a recent report by the international research firm Morning Consult, its 50% monthly active adult cryptocurrency traders are the highest in the world. Because of the falling value of the Naira, many Nigerians who want to protect their wealth are becoming more interested in Bitcoin and stablecoins.
More recently, Nigerian authorities partnered with crypto exchange Binance to develop a digital economic zone focused on crypto and blockchain-related businesses.
Nigeria’s Push for a Cashless Society
Nigeria announced limits on cash withdrawals a year after eNaira, its own central bank’s digital currency, was introduced in an effort to promote the use of alternative payment methods. The decision is expected to have an impact on more than 200 million people.
The CBN set new limits on over-the-counter withdrawals, capping them at $1,123 for businesses and just $225 for individuals per week.
The cashless government of the African nation also restricts the amount of cash that can be withdrawn from ATMs to $45 per day, with only $0.45 bills and smaller denominations being accepted. Customers will still occasionally be able to withdraw larger amounts, but they will be charged a processing fee of 5% to 10%.