Nigeria’s could get a clear stance on the classification of cryptocurrencies from the country’s Nigeria’s Securities and Exchange Commission (SEC) will give the Nigeria’s blockchain community and cryptocurrency exchanges clearer point on classification of cryptocurrencies before the year runs out.
The Framework for the Cryptocurrency Regulation.
With regards to its capital markets, the regulatory institution is set to implement the roadmap for the fintech industry.
According to how it is being structured to take place , the roadmap goes like this; between the last quarter of this year and the first quarter of 2020, the SEC is expected to:
1. Take a Decision on its preferred classification of cryptocurrencies which is either as commodities, securities or currency.
2. Development of framework for the regulation of Virtual Financial Assets (VFAs) and VFA Exchanges.
3. Set up guidelines and standards for whitepapers and ICOs.
4. The framework for KYC and due diligence for cryptocurrencies, tokens , Virtual Financial Assets, , and ICOs should be developed
5. Define clear classification for tokens based on their unique properties. They could be payment tokens, asset tokens, utility tokens or others.
During a Capital Markets Committee brief last month, Acting Director-General of the SEC, Mary Uduk, stated that the Working Group to drive the implementation of the roadmap would be handled by Adeolu Bajomo, the Vice-President of the Fintech Association of Nigeria. As reported by Pulse,
Cryptocurrencies as Commodities or Securities But Not as Currency
Most importantly among the recommendations is for the SEC to recognise cryptocurrencies as commodities or securities, and not as a currency which was arranged by a committee comprised of officials from the regulatory agencies, a member of the blockchain community, and the private sector,
However, its’ expected that this classification will have tax implications for investors.
The central bank’s directive last year, stated that “virtual currencies” were not a legal tender and this recommendation is already in line with CBN directive.
Presently, Cryptocurrencies have lacked a single, definite identity. Take for instance, Germany where it is being treated as money and means of payment while the Howey test is used by the US to decide whether a cryptocurrency is a security or not.
Nigeria and Crypto Adoption.
Citigroup, , reported in January 2018 that Nigerians happens to be the third-largest holders of bitcoin as a percentage of gross domestic product (GDP), this is according to a US investment firm , Citigroup. Citing the usage which basically ranged from ¬trading to making fast, low-cost cross-border transactions, saving on the high fees taken by commercial banks and traditional money-transfer services.
In Nigeria there is still a small number of people with access to the financial system despite a fast-growing young population with a significant size below the age of 35. Also Less than 50 million people with bank accounts in a population of over 180 million. Ultimately Blockchain applications could be a great way millions of underserved people could get access into the financial system.
With the SEC framework expected to kick off , will take responsibility for the regulation of cryptocurrencies in the country soon. Therefore there will be tight scrutiny of the crypto companies and more secured crypto trading ecosystem and more confidence in blockchain technology.
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Credits: Feranmi AkeredoluJOIN OUR COMMUNITY