Nigeria to implement blockchain technology in the banking sector

Nigeria to implement blockchain technology in the banking sector

Nigerian President-elect Bola Tinubu has issued a manifesto that, if implemented, will allow the use of blockchain technology and cryptocurrencies in the country’s banking and financial sectors. The proposed laws would require digital asset issuers to register with the Securities and Exchange Commission (SEC), and all digital asset offers and investments would be required to conform with SEC standards. 

In the manifesto, Tinubu said: “We will reform the policy to encourage the prudent use of blockchain technology in banking and finance, identity management, revenue collection and use of crypto assets. We will establish an advisory committee to review SEC regulation on digital assets creating a more efficient and business-friendly regulatory framework.”

The manifesto urges that the SEC evaluate existing digital asset restrictions to make them more business-friendly. The new rule establishes a framework for regulating digital assets in Nigeria, such as cryptocurrencies and other digital tokens. The manifesto also coincides with the Central Bank of Nigeria’s (CBN) eNaira — the country’s central bank digital currency — and ambitions to extend the coin’s adoption, which has fallen short of expectations.

In January 2023, The Central Bank of Nigeria (CBN) issued the Nigeria Payments System Vision 2025 policy statement. The main takeaways were the potential of stablecoins, the use of blockchain technology to power a central bank digital currency (CBDC), and regulatory concerns for initial coin offers (ICOs) over the next two years. The 83-page study discusses a number of ramifications for the current payment structure, with blockchain-based solutions taking centre stage. 

Nigerians have demonstrated a keen interest in cryptocurrency. The government thinks that the planned SEC regulation change would attract more investors in the digital and economic sectors, hence stimulating economic growth. The CBN hopes to boost the usage of its digital currency, the eNaira.The plans spur employment growth, implementation, and scale could the outcome been met positively by business lobby groups.

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