Nigeria’s Securities and Exchange Commission (SEC) is proposing stricter regulations for cryptocurrency businesses. The key change involves a massive increment in registration fees for crypto exchanges, jumping from ₦30 million to a hefty ₦150 million.
Let’s break it down:
- Initial amount: ₦30,000,000
- Current amount: ₦150,000,000
- Difference: ₦150,000,000 – ₦30,000,000 = 120,000,000
- Percentage increase: (Difference / Initial amount) * 100% = (120,000,000 / 30,000,000) * 100% = 400%
This proposed fourfold increase in license fees has sparked criticism from industry stakeholders. They argue this steep hike could cripple local businesses, putting them at a significant disadvantage compared to foreign competitors with more financial resources.
However, the Nigerian Securities and Exchange Commission (SEC) thinks otherwise, they believe that this move will improve clarity within the regulatory framework and incorporate feedback from industry players, particularly after recent discussions with the Central Bank of Nigeria (CBN). The amendments also include a name change for the regulations, aiming for better exchange practices.
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This surge in crypto interest coincides with Nigeria’s current economic crisis and high inflation wreaking havoc in the country. In June 2023, the country abandoned its fixed currency exchange rate, leading to record-breaking inflation. As of January 2024, consumer inflation reached nearly 30%, which is now a big problem and one of its kind ever experienced in the country over the years.
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Despite the proposed regulations, Nigeria remains a significant player in the global cryptocurrency industry. The country boasts one of the world’s fastest-growing crypto economies and ranked second globally for crypto adoption in 2023. Interestingly, Nigerians topped the charts for online searches related to cryptocurrency in August 2022.
The SEC’s proposed regulations come up due to the current economic crisis. Right now, it remains to be seen how these changes will impact Nigeria’s crypto industry.