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Nigerian SEC Claims That The Central Bank's Crypto Ban Has Caused Market Disruption

By Harry B - Crypto Specialist - 16-04-2021

The Nigerian Securities and Exchange Commission (SEC) says it is collaborating with the central bank to develop a regulatory structure to buy crypto and digital assets.

The director-general of Nigeria's Securities and Exchange Commission, Lamido Yuguda, has stated that the central bank's ban on crypto trading has created massive market disruptions.

As per The Guardian, the SEC director-general said this during a press conference held following the Capital Market Committee meeting on Thursday. The Central Bank of Nigeria banned commercial banks from servicing cryptocurrency exchanges in February, as previously stated by Cointelegraph.

According to Yuguda, the commission has been forced to put its proposed cryptocurrency regulatory framework, originally announced in September 2020, on hold. The SEC director-general also stated that the commission's crypto regulatory plans will be suspended before exchanges can open bank accounts in the country.

As part of his speech, the SEC chairman stated that the commission was collaborating with the CBN to develop an optimal regulatory framework for cryptocurrencies in the country. Despite the crypto ban, the SEC, according to Yuguda, is continuing to support the growth of fintech in Nigeria.

Following the CBN crypto ban, cryptocurrency purchases and sales are only possible via peer-to-peer networks, resulting in huge premiums on digital currency rates. In March, the central bank governor stated that the CBN was not opposed to cryptocurrency trading in the country, but that such transactions could not take place through commercial banks.

Lumo, a crypto exchange site, responded to the CBN ban in a previous statement shared with Cointelegraph, saying that “blanket bans push people underground,” adding:

“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 … Our view is that P2P trading would go against the spirit of the CBN’s directive.”

Meanwhile, Nigeria's Vice President, Yemi Osinbajo, has previously urged regulators to take a more nuanced approach to crypto and blockchain regulation.

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