The Securities and Exchange Commission (SEC) has set up a fintech division to study crypto investments and products in order to come up with regulations, the Director-General of the commission, Lamido Yuguda said on Thursday.
“We are looking at this market closely to see how we can bring out regulations that will help investors protect their investment in blockchain,” Yuguda was reported to have said by Reuters in a virtual interview in Abuja.
He did not provide a time frame for issuing regulations but said the SEC will step in with regulations once crypto is allowed within the Nigerian banking system.
The SEC has sought to regulate crypto on the grounds that they qualify as securities transactions.
Nigeria is one of the biggest markets for crypto trading, but in February the Central Bank of Nigeria (CBN) banned banks from transacting or facilitating deals in cryptocurrencies.
The use of bitcoin, the original and biggest cryptocurrency, has boomed in Nigeria in recent years, driven by payments from small businesses and a weakening naira currency, which makes it difficult to get the U.S. dollars needed to import goods or services.
Yuguda said the commission has been in talks with the CBN, part of which led to the plan by the regulatory bank to launch the country’s digital currency, e-naira.
The commission is seeking to work with fintech firms to boost the marketing of domestic securities to prevent capital flight.
The central bank this month blocked the accounts of six firms for allegedly sourcing funds from illegal foreign exchange operators to buy foreign securities and cryptocurrencies.
He said the SEC is looking to boost savings through investment schemes, which currently have over N4 trillion under management split between public and private fund managers.
Yuguda said the regulator has asked private managers to put in place custody arrangements to protect investors.