Blockchain and cryptocurrency regulation is a work in progress, even at a global level. Therefore, a country like Nigeria which arrived late on the technological scene, not much is done either. 

So far, everyone seems to be floating in an ambiguous environment, without a properly defined direction. The thing is that the situation reels with an air of uncertainty, and no one really knows what could happen next.

Nigeria is not alone among the countries that do not have a clearly defined regulatory framework for the blockchain industry. As a matter of fact, only a few nations currently have temporary guidelines on blockchain and cryptocurrencies, while something more robust is in the pipeline.

Certainly, the situation described above is not unusual, because even the technology itself is still in its early stages. After all, it wouldn’t be the most sensible thing to establish regulations on an industry that is still developing. 

Therefore, if the more proactive nations are still struggling in these areas, then you can imagine where developing countries like Nigeria will find itself.

What Are Regulators Doing?

Even though Nigeria has no regulation for the industry, the mandated institutions are not sitting idle. On the contrary, there is a lot of activities going on in the sector. Maybe not as much as a lot of people will want, especially industry players. 

The Central Bank of Nigeria (CBN) has engaged numerous stakeholders to work out a regulatory framework for the industry. 

While it is ongoing, they have taken measures to discourage the public from going all out into an ecosystem that is yet to be fully defined. At a point, banks were even warned not to get involved in cryptocurrency transactions since it has no legal backing.

Is Nigerian Crypto Industry Resorting To Self-Help?

Besides the CBN’s actions, specific independent organisations are also engaging both the government and the public on the knowledge of blockchain and cryptocurrency. The Cryptography Development Initiative of Nigeria (CDIN) and the Stakeholders in Blockchain Association of Nigeria (SiBAN) are two such organisations that are involved in such activities. 

These groups have embarked on public sensitisation exercises and also engage with government agencies to achieve a balanced framework for the industry. Another critical role that these groups play is in the area of internal regulation. 

As organised groups, they show support for participating members by scrutinising projects to ensure adherence to industry standards. Additionally, they are building bridges between regulators and the Cryptocurrency industry. 

So far, it seems they have done an excellent job in these areas. It is visible in the support and participation that they have gotten from the government during conferences and similar events.

Current State of Crypto Industry

Despite the ambiguous nature of the blockchain and cryptocurrency ecosystem in Nigeria in terms of regulation, the following situations can be deduced at the moment:

  • The regulators are showing interest in the development of a regulatory framework for the industry, even though we cannot tell how long it will take them to come up with one.
  • The CBN decries the weak security system and customer protection policy of existing crypto exchanges. It could be addressed by the implementation of a proper legal framework.
  • All exchanges that deal with fiat have been made to implement KYC rules. 
  • Cryptocurrency is yet to be appropriately defined, whether as assets or currencies. It is not unique to Nigeria, as many countries are also facing a similar challenge. 
  • Blockchain and crypto startups currently function like any other mainstream business, under the same tax laws and legal conditions.

As mentioned earlier, there seems to be a wait and see approach on the side of the regulators. Perhaps, they are observing what will pertain in more proactive countries and then find a suitable way of adapting it to the Nigerian system.