Nigeria’s Securities and Exchange Commission (SEC) plans to issue licenses to cryptocurrency exchanges.

In June, the SEC amended its rules on Digital Asset Issuance, Offering Platforms, Exchange and Custody, while announcing its plans to regulate the nascent asset class. The amendment process is expected to improve the regulatory environment.

In an interview on Bloomberg Television, the SEC Director-General Emomotimi Agama said: “Being a crypto enthusiast and fintech enthusiast, I can tell you without doubt that this is going to happen sooner than you think.”

“We must support the youths of this country to be able to achieve the benefit that is accruable in fintech. The market size is huge and it is growing,” Agama added.

One of the fastest-growing crypto economies

Over the past few years, Nigeria has emerged as one of the fastest-growing crypto economies. In December last year, the Central Bank of Nigeria lifted restrictions on Nigerian banks facilitating cryptocurrency transactions after almost two years since imposing a ban on lenders engaging with digital currencies.

The central bank acknowledged that it was unjustifiable to maintain stringent restrictions on financial institutions considering the increasing global demand and adoption of crypto.

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Last year, Nigeria was also the second-biggest economy in terms of crypto adoption. In August 2022, Nigeria was named the most crypto-obsessed country in the world by the number of Google searches for “cryptocurrency” or “buy crypto.”

Naira withdrawals stopped after regulatory hurdle

Earlier this year, cryptocurrency exchange OKX stopped Naira withdrawals due to regulatory issues after the world’s largest crypto exchange, Binance, was accused of manipulating Nigeria’s currency and money laundering.

Seychelles-headquartered OKX, the second-largest global digital asset exchange by trading volume, had also stopped serving other regions, like India, due to regulatory hurdles.

The SEC wants “to provide a platform where people can formally do these things and we are able to get all of the information that we need,” Agama told Bloomberg. “What we will not encourage is the use of cryptocurrency to manipulate our currency.”

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