Nigerian minister demands creation of a new regulatory agency to supervise crypto regulation

Prince Clem Agba, Nigeria’s minister of state for budget & national planning, has called for the creation of a new regulatory body that will oversee the regulation of crypto activity in the country.

Prince Clem Agba 2This was made known at the recently held Crypto Conference, organized by Technext, a tech media organization. He said that a new body may be needed for crypto regulation as the Nigerian law doesn’t specify which agency between the Central Bank of Nigeria and the Securities and Exchange Commission should have control of the space.

“Nigeria’s SEC is currently in discussions to facilitate better understanding and regulation for the crypto space. It is possible, however, that laws today do not explicitly define who has the power to regulate cryptocurrency.

The crypto regulatory role of the CBN

The central bank has the responsibility of controlling the Nigerian crypto market. Although has not been a good experience for many players, including traders in crypto exchanges (P2P), the minister has an explanation as to why the CBN is in control.

He stated that the Executive, through the Ministry of Finance, Budget and National Planning, and CBN, which is an autonomous body, are potential government stakeholders in financial regulation.

“The Ministry of Finance, Budget, National Planning and CBN all have policy-making as part of the mandates. The Ministry of Finance, Budget, and National Planning is not able to make policy, however.
The minister stated that the CBN supervises monetary policy while the ministry oversees fiscal policy.

He believes that the difficulty of deciding who can regulate the crypto space is in the classification of cryptocurrency.

He stated that cryptocurrencies fall under the CBN’s jurisdiction, as it is believed.
Fall under the monetary policies of the country.

Cryptocurrency trading is safe for citizens

The minister called for fair regulation of crypto space but noted that safety should be the top priority when citizens participate in the industry.

We all know what cryptocurrencies can do, and the wealth creation and inclusion they have fostered. He said that thousands of people have experienced life-changing gains by trading in and holding cryptocurrencies. But, hundreds of thousands have suffered losses due to scams in space.

Prince Agba acknowledged, however, that these types of scams aren’t limited to the crypto sector. He pointed out that Nigerians are susceptible to investment scams in regulated areas, and the problem isn’t exclusive to the crypto sector.

However, he argued that these scams are easier to commit for uninitiated citizens in unregulated fields with a high education barrier.

Ministers should consider that many more people could fall for these types of scams in regulated sectors where checking the legitimacy and registration with SEC could be as simple as cross-checking.

Final words

Nigeria has had a difficult time regulating the entire tech sector, not just crypto. Regulators in Nigeria seem to have a tendency to ban the crypto space before they understand it. This is despite the fact that innovation is rapidly catching up to regulation.

Austin Okere, the founder of Computer Warehouse Group (CWG), described this phenomenon as dumb regulation. The renowned financial expert says dumb regulation occurs when there isn’t enough knowledge or regulation is done out of fear.

The CBN began its crackdown on the crypto space in February when it directed banks to stop facilitating transactions involving cryptocurrency. Many people were forced to switch to P2P trading. Crypto exchanges had to rethink their business. Patricia was forced out of the country.

The apex bank ordered banks to close down accounts of people and businesses that were suspected of trading in crypto. This was much later in the year. This was a major blow to the P2P market as the country’s trading volume dropped 43% in the week that followed.

Prince Clem attempted to dispel the notion that regulation is “akin a big hammer slamming into an industry’s activities.” The important question is: With how much regulation the CBN has brought to the crypto space, would it be wrong to say that it is a huge hammer slamming into the space?

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