This is an opinion editorial by Heritage Falodun, a Bitcoin consultant and computer scientist based in Nigeria.

On May 3, 2023, during a federal executive council meeting presided over by President Muhammadu Buhari at the council chamber in Abuja, the Nigerian government approved the official use of blockchain technology in the country.

Nigeria’s minister of communications and digital economy, professor Ali Isa Pantami, disclosed the official approval of “The National Blockchain Policy For Nigeria,” stating that the “the new policy was a product of consultations with 56 institutions and personalities whose end goal is to institutionalize blockchain technology in Nigeria’s economy and security sectors.”

Nigeria’s History With Bitcoin Regulation

Taking a deep dive into understanding the disposition of the Nigerian government toward blockchain-dependent innovations over the years will paint a clear picture of how crucial and important this recent policy and federal approval is for the Bitcoin space in Nigeria and Africa at large.

On January 12, 2017, the Central Bank of Nigeria (CBN) issued a circular which cautioned financial institutions and the general public about the risks associated with blockchain-dependent technologies, such as Bitcoin. Building on that previous warning and directive, on February 5, 2021, the Central Bank of Nigeria officially prohibited banks from facilitating any Bitcoin- and crypto-related transactions by reissuing the circular — a ban that remains unreversed as at the time of writing.

This restrictive policy come at a time when adoption of Bitcoin and shitcoin-related activities was on the rise in Nigeria, and it was a restriction that further fueled the use of Bitcoin and stablecoins as users who are wallowing in the pains of financial restriction increasingly discovered the power of decentralized Bitcoin innovations, like peer-to-peer (P2P) marketplaces.

Amid all of these impromptu regulatory measures, CBN was apparently busy creating what it considered an alternative to shitcoins: a government-controlled digital currency called the e-naira, which was officially launched on the October 25, 2021, unequivocally built on a centralized system, not a decentralized blockchain like Bitcoin’s. Meanwhile, Nigeria’s Security And Exchange Commission (SEC) was occupied with creating policy frameworks for token-issuance platforms and exchanges.

All these regulatory changes were not unconnected to the government’s awareness of just how thriving the blockchain industry is in Africa’s most populous country.

What Does This Mean For Bitcoin In Nigeria?

At this point, one will naturally ask what another regulatory update in the national blockchain policy means for Bitcoin.

A quick but detailed response would be: This is definitely a welcomed development for Bitcoin advocates in the country and one of the possibly many steps that we might witness in the right direction.

From my interpretation, this policy is focused more on giving a direct government overview to relevant regulatory bodies such as the National Information Technology Development Agency (NITDA), CBN, SEC, the Nigerian Communications Commission (NCC) and the National Universities Commission (NUC), among many others who are now expected to develop more detailed regulatory frameworks from using blockchain-based innovations like Bitcoin. The government is moving from being totally repelled by or antagonistic about Bitcoin-, blockchain- and crypto-related activities to now accepting them by default and creating a regulatory environment for them to move forward.

And while altcoins and other development and products dependent on blockchains excluding Bitcoin still stand a chance to remain regulated and subjected to the directives of these incoming regulations, Bitcoin uniquely repels such regulations.

As a stakeholder in the African Bitcoin space, I must confess that consistent clarity from governments will not only help in driving adoption but will also create an enabling environment for Nigerians to incorporate decentralized blockchain technology, like Bitcoin, into scaling their businesses and ways of life, while opening numerous legal opportunities for everyone.

As the industry keeps shaping up, keep tabs on the space, as Nigeria President-Elect Bola Tinubu has promised to enable the prudent use of blockchain technology and cryptocurrencies in the nation’s banking and financial sector. My fingers remain crossed until we experience full implementation of Bitcoin-friendly regulations in Nigeria.

This is a guest post by Heritage Falodun. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Source link

The recent approval of a blockchain adoption strategy by the Nigerian government has been described as a milestone that will “add clarity, trust and confidence in the [blockchain] ecosystem.” The unveiling of the adoption strategy document has also been hailed as a step that will lend “some form of legitimacy” to a technology that many Nigerians still only associate with cryptocurrency.

Central Bank Expected to Eventually Change Its Position on Crypto

The Nigerian government’s recent approval of a blockchain adoption strategy has been hailed by advocates of the technology as “a significant milestone for the blockchain industry in Nigeria.” The advocates have also argued that the unveiling of the strategy document by the government helps to lend “some form of legitimacy” to a technology that many still confuse with cryptocurrency.

As recently reported by Bitcoin.com News, the approval of the blockchain strategy followed what Isa Pantami, the country’s minister of communications and digital economy, characterized as widespread consultations with some 56 Nigerian institutions and personalities. However, despite the positive step taken by the government of outgoing president Muhammadu Buhari, some in Nigeria’s crypto space have insisted that this will not result in the Central Bank of Nigeria (CBN) reversing its position on cryptocurrencies.

However, according to Rume Ophi, the executive secretary of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), the Nigerian central bank will eventually change its stance and start regulating cryptocurrencies just as countries like Saudi Arabia have done. Ophi also hinted that the incoming government of Bola Tinubu might result in changed fortunes for Nigeria’s crypto industry.

“A few players in the space think the policy is just an academic exercise but I think with time there will be a balance just like the Markets in Crypto Asset [that has] just [been] approved by the European parliament. The new [Bola Tinubu] administration might just do something different from the outgoing administration,” Ophi said.

Nigeria’s ‘All-Encompassing Approach’ Hailed

Meanwhile, Binance’s director for West and East Africa, Nadeem Anjarwalla, said the approval of the adoption strategy means that Nigeria is “positioning itself as a nation significantly ahead of the curve – supporting further blockchain innovation, user protection, security and economic competitiveness in the long term.”

The adoption strategy will also “add clarity, trust and confidence in the ecosystem” which is still in its very early stages of development. Anjarwalla also commended what she described as the Nigerian government’s “all-encompassing approach” which is laid out in the policy document.

As stated in the National Blockchain Adoption Strategy, the government of outgoing Nigerian president Muhammadu Buhari believes the unveiling of the strategy document will likely bolster efforts aimed at “creating and fostering an efficient, safe, and economically viable digital Nigeria using blockchain technology.” The Nigerian government said it is also confident that the blockchain will not only facilitate the development of Nigeria’s digital economy but will also “enable citizens to have more confidence in digital platforms.”

At its conclusion, the strategy document said while the blockchain is said to pose challenges to governments, Nigeria’s focus will be “on the application of blockchain to resolve business and governance process inefficiencies.”

Register your email here to get a weekly update on African news sent to your inbox:

What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.