Nigeria’s journey toward blockchain adoption is encountering significant hurdles, primarily due to ongoing regulatory uncertainties. Despite the country’s proactive steps, such as the introduction of a national blockchain adoption strategy in May 2023 and the establishment of the National Blockchain Policy Steering Committee in May 2024, these efforts are at risk of stalling without clearer regulatory frameworks.
Current State of Blockchain Regulation in Nigeria
Obinna Iwuno, President of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), has expressed concerns that Nigeria’s regulatory environment is still evolving, leading to uncertainty that hampers the adoption of blockchain technology. Although the Central Bank of Nigeria has lifted restrictions on banks’ dealings with cryptocurrencies—permitting virtual asset service providers (VASPs) to operate accounts with banks—banks themselves are still prohibited from holding or trading cryptocurrencies. This partial lift creates a confusing landscape for both financial institutions and blockchain enterprises.
Moreover, while the Securities and Exchange Commission (SEC) is working on regulatory measures for crypto assets, the absence of issued licenses has led to further uncertainty within the industry. The delay in establishing a comprehensive and cohesive framework for blockchain and cryptocurrency operations in Nigeria has raised concerns among stakeholders.
International Comparisons and Suggested Strategies
SiBAN’s president highlights how other countries have successfully navigated similar challenges by implementing clear and supportive regulatory frameworks. For instance:
– Estonia has achieved regulatory clarity through well-defined legal structures and government policies.
– Singapore has fostered a progressive regulatory environment for blockchain technology and cryptocurrency, spearheaded by the Monetary Authority of Singapore.
– Switzerland provides a clear classification system for cryptocurrencies and tokens, distinguishing between payment tokens, utility tokens, and asset tokens.
These examples suggest that Nigeria could benefit from adopting similar strategies, particularly in the classification of digital assets, which could provide the clarity needed for broader adoption.
Recommendations for Nigeria’s Blockchain Policy
Chimezie Chuta, Chairman of the National Blockchain Policy Implementation Steering Committee, has proposed that Nigeria should consider adopting consortium or federated blockchains. This approach involves governance by a group of organizations rather than a single entity, which could offer several advantages:
– Controlled Access: Easier management of who can participate in the blockchain network.
– Scalability and Efficiency: Enhanced ability to scale operations while maintaining high efficiency.
– Support for Smart Contracts: Better integration and enforcement of smart contracts.
– Regulatory Compliance: Improved alignment with regulatory requirements.
These suggestions aim to foster collaboration among stakeholders, improve scalability, and ensure regulatory compliance, which could accelerate blockchain adoption in Nigeria.
Nigeria’s ambition to become a leader in blockchain technology is evident through its various initiatives. However, to achieve its goals, the country must address the regulatory uncertainties that currently stifle innovation and adoption. By looking to international examples and considering the adoption of consortium blockchains, Nigeria can create a more favorable environment for blockchain technology to thrive, thereby enhancing its position in the global digital economy.
Source: punchng.com
