Nigeria’s efforts to adopt blockchain technology are at risk due to unresolved regulatory uncertainties.
The President of the Stakeholders in Blockchain Technology Association of Nigeria (a self-regulatory body in Nigeria), Obinna Iwuno, highlighted those concerns in a recent chat with The PUNCH.
In May 2023, Nigeria, Africa’s most populous country, introduced a national blockchain adoption strategy to drive innovation, establish robust legal frameworks, and foster public-private partnerships.
In May 2024, the National Information Technology Development Agency reconstituted the committee, named the National Blockchain Policy Steering Committee, to validate trends in blockchain technology and incorporate new stakeholders for inclusive adoption and implementation.
As part of those efforts, the NITDA unveiled “Nigerium,” an indigenous blockchain platform designed to enhance data security and safeguard national interests, last month.
“Nigeria’s regulatory environment for blockchain and cryptocurrency is still evolving. Uncertainty and a lack of clear regulations have hindered the adoption and integration of blockchain technology,” he stated.
According to Iwuno, regulatory uncertainty in Nigeria in the early years stemmed from the absence of a comprehensive and cohesive framework governing blockchain technology and cryptocurrency operations.
The Central Bank of Nigeria has lifted restrictions on banks’ dealings with cryptocurrencies, allowing virtual asset service providers to operate accounts with banks.
However, banks are still prohibited from holding or trading cryptocurrencies themselves.
The Securities and Exchange Commission is developing regulatory measures for crypto assets, although no licenses have been issued yet, leading to uncertainty in the industry.
The SiBAN president said several countries had faced similar challenges but had developed effective strategies to address regulatory uncertainty surrounding blockchain technology.
“Estonia’s regulatory clarity comes from its well-defined legal structures and supportive government policies.
Singapore has developed a progressive regulatory environment for blockchain technology and cryptocurrency, facilitated by the monetary authority of Singapore.
“Nigeria could benefit from adopting a similar classification system for cryptocurrencies and tokens as Switzerland’s, which includes a clear classification of cryptocurrencies and tokens, distinguishing between payment tokens, utility tokens, and asset tokens,” Iwuno exemplified.
The Chairman of the National Blockchain Policy Implementation Steering Committee, Chimezie Chuta, suggested that the Nigerian government should adopt a consortium or federated blockchains.
He said that would offer controlled access, easy collaboration among stakeholders, scalability, efficiency, support for smart contracts, and better regulatory compliance.
“This kind of blockchain is governed by a group of organisations rather than a single entity,” Chuta told The PUNCH in July.