As cryptocurrency usage expanded globally due to inflation and pandemic financial challenges, more countries have tried to leverage the benefits of crypto assets and blockchain. However, few countries like the US and Canada have developed proper regulation guidelines.
At the same time, regulating cryptocurrency is quite complicated, given its decentralized nature.
Countries have to consider various legal and procedural evidence of the assets’ safety, which is still not clear for many governments as cryptocurrency is volatile. Investors’ safety depends, in many cases, on their precautions. For example, those who learn how to buy cryptocurrencies have to ensure their own portfolio safety by employing cybersecurity measures and being able to secure their own private key.
Therefore, governments have educated their people to spread awareness about the sector and its pros and cons. For example, El Salvador, the only country where Bitcoin is legal tender, has provided citizens and students free classes.
However, proper crypto policy is also essential, and countries like Nigeria have taken the matter
into their own hands and are now toughening things up for investors.
Nigeria is the leading country in Africa for crypto regulatory frameworks
Although initially banning cryptocurrency, the country now engages more with the sector and sees potential financial opportunities. However, its approach is a bit stricter than that of other countries, as its Security and Exchange Commission provided insight into a decision allowing them to take legal action against businesses and even individuals performing unregulated transactions with crypto assets.
Therefore, companies need to seek regulation before offering their crypto services to customers. Otherwise, they might face problems continuing their business in the country. Only two exchanges in Nigeria are regulated by the SEC, including Busha Digital and Quidax Technologies, as they have provisional operating licenses. The institution is following protocols of Anti-Money Laundering and Combating the Financing of Terrorism when checking companies.
However, crypto users notice the government’s unpredictability
The government’s act of regulating crypto is laudable as it will ensure users’ safety while allowing them to freely invest and trade in crypto. Still, many observed the lack of consistency in regulations and statements, which might pose further challenges for citizens instead of helping them.
That’s because Nigeria was against cryptocurrency in 2021. It banned it for about a year, after which it developed a regulatory framework for crypto. Two years later, when the ban was gone, officials still restricted P2P crypto exchanges. Soon enough, Binance would announce its exit from the country and cease operations with the Nigerian naira.
Now, regulators want to leverage the power of cryptocurrency, but only after employing strict regulations. However, their operations lack specific information about the process of getting regulated, aspects of taxation, and more, which challenges crypto users.
Still, the crypto market size is growing in Nigeria
Despite the difficulties crypto investors face in Nigeria, the market size grows by the year, making the country one of the leading mitigators of the industry, along with South Africa. According to data from Statista, the number of crypto users in Africa will reach 53.89 million by 2025, pushing the market’s innovation forward.
At the same time, the increasing global demand for cryptocurrencies has prompted the government to lift restrictions and start delivering crypto platform licenses since August this year. The plan is to enhance the monitoring of digital asset trading for platforms and exchanges and improve the ecosystem.
How can education bring more interest into crypto?
While crypto users are eager to create a safety net with digital assets as countries’ inflation worsens, the lack of education and awareness on the use of crypto is a massive step back for both parties. The government is backing away from regulating it due to few talents in the industry who can shed some light on the subject, whereas investors are too excited to reap the benefits too fast.
Many countries are constantly making efforts to educate the population on cryptocurrency so everyone using it has a brief idea about its pros and cons. El Salvador was the first country to make Bitcoin legal tender and has created a special educational program that would offer people certification useful in getting a job or simply learning about crypto properly.
Other countries change the school curriculum and introduce students to concepts of decentralization, blockchain, and cryptocurrency as teachers receive adequate training. According to these plans, governments should be able to provide new jobs and opportunities for those who want to contribute to Web3 adoption, which will include these technologies.
Still, how safe is decentralization?
The problem with decentralization is that it would take quite some time to apply to our world, where there’s a technological delay in adoption across different regions. Therefore, it might create an even deeper hollow between cultures.
On the other hand, decentralization offers numerous benefits to businesses and users, including the following:
However, we could only achieve these benefits with the help of developers and employees specialized in blockchain and decentralization. The industry is expanding currently, so depending on the problem, there is a lot of knowledge and skills to master.
The regulatory challenge is one of the most considerable because, without approval from governments and authorities, it might be more difficult for communities to use these technologies. Therefore, we can only wait and see how this will turn out in the future.
What do you think about Nigeria’s decision to regulate crypto?
Nigeria has finally decided to regulate crypto businesses that offer citizens services to protect them. The announcement comes shortly after cryptocurrencies were banned in the country and again regulated, which confused businesses and investors.
Still, the regulation movement is one step ahead of adopting crypto, considering that Nigeria is one of the leading countries in terms of crypto users, boosting the market’s value.
