The Securities Exchange Commission (SEC) of Nigeria has introduced new rules that will regulate the issuance, custody and exchange of digital assets.
It marks a leap forward for the country which is committed to ensuring that it is adopting these new blockchain assets rather than dismissing them altogether.
Many other countries have struggled with creating clear-cut regulation, including the European Union and the US, although processes have started in both.
Meanwhile, the Central Bank of Nigeria (CBN) is working on how the new SEC rules will be applicable the sector and what can be done to ensure the financial industry remains protected from the risks that crypto adoption may expose it to.
Currently the only businesses allowed to deal in crypto in Nigeria are financial institutions, such as banks.
SEC seems more open to digital assets than the CBN which still has its qualms about the mass adoption of crypto. SEC wants to make sure that Nigeria is on par with other markets that are rapidly regulating and developing frameworks for their crypto markets.
However, SEC will expect Nigerians who engage with crypto to secure something called a virtual asset service provider (VASP) license which will expose them to regulation from the watchdog.
Anyone who attempts to run digital businesses with crypto without the appropriate VASP license will elicit enforcement action from financial regulators.
VASPs will have to comply with anti-money laundering and combatting financial terrorism policies and ensure that their offers are in line with global practices in finance.
In the meantime, you may still continue to use your cryptocurrencies recreationally at places such as 1xBit, Bitcasino, and FortuneJack.