Given the huge opportunities in the cryptocurrency market and the number of Nigerians actively playing therein, the Director General of the Security and Exchange Commission (SEC) Emomotimi Agama, on Thursday called for what he described as a balanced regulatory approach.
This, he said is essential if the country must harness the benefits and mitigate the associated risks, even as he said approximately 33.4% of Nigerians own or use cryptocurrencies.
Speaking at the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria (ACMAN) with the theme ‘Crypto Assets and the Nigerian Economy: Implications for Financial Markets Regulation’, on Thursday in Abuja, Agama said: “the country’s crypto market is estimated to be worth over $400 million, with a significant portion of the population involved in cryptocurrency trading and transactions.”
The country, he continued, can take advantage of the large number to further provide financial services for the over 38 million unbanked adults.
He warned that despite the numerous advantages, challenges persist, just s he raised concerns about illicit activities as highlighted by Nigeria’s Economic and Financial Crimes Commission (EFCC), which has reported cases of crypto-related scams.
He asserted that Crypto assets present significant opportunities and challenges for Nigeria’s economy noting that .
Some people do not have bank accounts but they have wallets, he said, adding that cryptocurrencies can also provide cheaper and more efficient methods of remittance for Nigerians in diaspora.
“Cryptocurrencies can significantly reduce remittance costs, with Bitcoin transactions cutting fees by up to 50%. Nigeria is one of the largest recipients of remittances in Africa. Cryptocurrencies offer a more efficient and cost-effective way for Nigerians abroad to send money home. With traditional remittance fees often being prohibitively high, cryptocurrencies provide a cheaper and faster alternative,” he said.
According to him, however, “the lack of a comprehensive regulatory framework has created uncertainty, which can deter both investors and innovators. Cybersecurity threats, including hacking and fraud, pose significant risks. A substantial portion of the population lacks adequate financial literacy, making them vulnerable to scams and risky investments,” he explained.
Agama, therefore, called for “collaborative efforts from regulators, industry stakeholders, and the public are crucial for developing effective regulations. I encourage continued dialogue and cooperation to ensure a secure and innovative financial ecosystem.”
the SEC DG projected that the volume of the cryptocurrency market in Nigeria would hit $52.5m by 2028, representing a 12.66% growth between 2024 to 2028.
According to Agama, despite economic challenges, the country has emerged as one of the leading countries globally in terms of crypto adoption and volume of transactions.
In his words, “reports indicate that Nigeria’s crypto transaction volume reached $56.7 billion between July 2022 and June 2023, representing a nine percent year-on-year growth.
In his remarks, Chairman of the SEC, Mairiga Katuka said the introduction of crypto presents an advantage for the markets and urged all to chart a course forward for Nigeria with its vibrant financial markets.
“Together we can drive the development of a vibrant resilient capital market in line with President Bola Tinubu’s dream on making Nigeria a prime investor destination.
“Let us work together to build a capital market that does not only see The needs of today but also anticipates the problems of tommorrow with view to finding solutions before the issues arise” he added.
