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The Nigerian government will reportedly soon pass a law that will recognize the use of Bitcoin (BTC) and other cryptocurrencies as a way to keep up with “global practices.”

The news was reported by Nigerian masthead Punch Newspapers on December 18 following an interview with the Chairman of the House Committee on Capital Markets, Babangida Ibrahim.

The report said that if the Investments and Securities Act, 2007 (Amendment) Bill is signed into law, it would allow the local Securities and Exchange Commission to “recognize cryptocurrency and other digital funds as investment capital.”

Ibrahim stressed the need for Nigeria to keep abreast of trends and developments in the capital markets;

“As I said earlier in second reading, we need an efficient and vibrant capital market in Nigeria. To do that, we need to be up-to-date [with] global practice”.

The report comes almost 24 months after Nigeria banned crypto activities in February 2021, when the Central Bank of Nigeria (CBN) ordered Nigerian crypto exchanges and service providers to cease operations and ordered banks to close the accounts of any individuals or entities. engaging in commercial activities;

But Ibrahim, who was also Nigeria’s president from 1985 to 1993, insists the passage of the law is not a 180-degree reversal on the ban, but rather a secondary review of what is within the CBN’s mandate;

“It’s not about that [the] If the ban is lifted, we are looking at the legality of what is legal and what is within the scope of our operations in Nigeria.”

“When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors were not even using local accounts. So they are not within the jurisdiction of the CBN. Since they are not using local accounts, there is no way the CBN can verify them,” he explained.

If passed, the law will amend the Nigerian Investments and Securities Act 2007.

In addition to legal recognition of Bitcoin and other cryptocurrencies, the law will outline the regulatory roles of the Central Bank of Nigeria and the Nigerian Securities Exchange Commission (SEC) in matters related to digital currencies, the report said.

The law also comes as Nigerians have also shown little interest in the Central Bank of Nigeria’s digital currency (CBDC), the eNaira, which has only received a 0.5% adoption rate 12 months after its launch in October 2022.

Related to: Emerging markets lead the global adoption index. Chainalysis report

Earlier efforts by the Nigerian government to crack down on crypto activity were also ineffective as adoption continued to grow after the February 2021 ban.

Between January and August 2021, Nigerians were second only to the United States in Bitcoin trading volume, and during the same period, Nigerians Googled “Bitcoin” more than any other country.

According to an April 2022 research study conducted by CoinGecko, Nigerians were also found to be the most encrypted nation. The interest is not surprising as Nigerians continue to struggle with rampant inflation and economic malaise.

Nigeria has also recently entered into early-stage discussions with cryptocurrency exchange Binance in September 2022 to develop a crypto-friendly economic zone aimed at supporting crypto and blockchain-related businesses in the region.