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The Nigerian central bank remains hostile to anything crypto besides a CBDC. Still, one high-level minister is defending the industry. Clem Agba, minister of state for budget and national planning, is calling for more precise and more welcoming regulation of the space. Like the United States, Nigeria struggles to classify crypto assets using existing financial terms correctly.
Fighting For Crypto In Nigeria
Minister Agba spoke about regulating the industry at a conference this Thursday, as reported by Bloomberg. He said that Nigeria risks denying crypto’s maximum potential to citizens and government due to regulatory uncertainties.
Agba’s comments come after Nigeria’s central bank ordered commercial banks to cease cryptocurrency operations, fearing threats to their financial system. Instead, Nigeria launched its Central Bank Digital Currency, the eNaira, in October. This asset should “make financial transactions easier and seamless for every stratum of the society.”
Nigeria has seen no shortage of human rights violations and authoritarian crackdowns on citizens in recent times. As such, its favorability of a government-sponsored, fully trackable CBDC over pseudonymous, censorship-resistant cryptocurrencies is understandable. It also likely explains China’s approach, hurriedly rolling out its digital yuan while banning crypto exchanges and miners from its borders.
“There is a challenge of who regulates cryptocurrencies because of its different classifications as securities or currencies,” Agba said. “Since our existing laws cannot explicitly stipulate who holds the power to regulate cryptocurrencies, there may be a need for an additional body to play that role,” he said.
Parallels With American Regulation
Agba’s experience in Nigeria is reminiscent of the US government’s troubles navigating the crypto space. For example, at the “Digital Assets and the Future of Finance” hearing days ago, multiple congress people were in disagreement with Gary Gensler on crypto classification.
The SEC chairman has repeatedly stated that he views most crypto tokens as securities, while only some are commodities. Meanwhile, Coinbase CFO Alesia Haas testified that cryptocurrencies are not securities. Instead, she said they are “a new form of digital property, or a new way to record ownership.”
As Agba points out with Nigeria, classification troubles have left regulatory bodies confused about their responsibilities. As such, President Biden has considered signing an executive order to coordinate these various groups on what they’re responsible for governing.
Some industry players, like Coinbase, showed their disappointment with the government’s lack of clarity. Nevertheless, the process continues to improve through hearings and specialized reports.