The director-general of Nigeria’s SEC, Lamido Yuguda, has declared that the ban on crypto by the central bank has led to important disruptions to the market.
As we reported, in February, the Central Bank of Nigeria banned commercial banks from servicing crypto exchanges. As a result, Yuguda said that the SEC had no option but to stop its planned crypto regulatory framework that had been announced a couple of months prior, in September 2020.
Yuguda has also said that the suspension of the crypto regulatory plans will remain in place until exchanges are allowed again to operate bank accounts in Nigeria.
As a result of the crypto ban, crypto buying and selling remain possible only through peer-to-peer channels, which has led to massive premiums on digital currency prices. A month ago, the governor of the central bank declared that the CBN wasn’t against crypto trading in Nigeria, but that such transactions couldn’t take place via commercial banks.
As reported before, crypto exchange platform Lumo responded to this by saying:
“Pushing people underground also makes it easier for scammers to exploit Nigerians, and we are already seeing Bitcoin trade at huge premiums in the country as a result of the ban. Other companies have made the choice to find workarounds that are less visible for regulators — for example, peer-to-peer trading. Our view is that P2P trading would go against the spirit of the CBN’s directive.”
Yemi Osinbajo, the VP of Nigeria, has called on regulators to adopt a nuanced approach to regulating crypto and blockchain as crypto will surely be a challenge for traditional finance in the years to come.