Nigeria to Pass a Bill Recognizing Bitcoin and Cryptocurrencies

Written by Ryan Green
2 mins, 44 secs Read
Updated On December 22, 2023

It came out in October 2021, just over a year ago, and only 0.5% of people in Nigeria have used the eNaira. Because of this, the law that is going to be made will be made. The news came out on December 18 in the Nigerian masthead Punch Newspapers. It was based on an interview with Babangida Ibrahim, the head of the House of Representatives Committee on Capital Markets.

Ibrahim emphasized how important it is for Nigeria to keep up with the latest trends and changes in the financial markets: “As I said when we talked about the second reading, Nigeria needs a busy capital market that works well. So we can do that, we need to know how people in other places do things.

The report comes after all cryptocurrency activities were banned in Nigeria in February 2021, almost 24 months ago. But Ibrahim, who was president of Nigeria from 1985 to 1993, says that the new law is not a complete reversal of the ban but rather a second look at what the CBN can do:

Instead, we are looking into how the situation is, what is legal, and how it fits with what we are doing in Nigeria. The Central Bank of Nigeria (CBN) found that most of these investors still need bank accounts in the country when they first decided to ban cryptocurrencies. This means that they are not controlled by the CBN. 

If the bill is signed into law, the Nigerian Investments and Securities Act of 2007 will be changed to reflect the changes. The report says that the law will not only make Bitcoin and other digital currencies legal, but it will also explain the roles of the Central Bank of Nigeria and the Securities Exchange Commission (SEC) in regulating digital currencies. This will also be done by making Bitcoin and other cryptocurrencies legal.

Nigerians have yet to show much interest in the eNaira, the country’s central bank’s digital currency. Only 0.5% of people were using the eNaira in October, a year after it was first made available to the public.

When the ban was enacted in February 2021, more people began using cryptocurrencies. This shows that the Nigerian government’s early efforts to stop people from using cryptocurrencies probably didn’t work either. Nigerians were slightly less likely to trade Bitcoin than Americans from January to August last year. Nigerians were more likely than people from any other country to google “Bitcoin” during the same period. All through the year, this kept happening.

How will the eNaira Work?

The eNaira will work the same way as the real Naira. Customers will be able to keep their eNaira in wallets made by banks regulated by the government. Also, it will be up to these institutions to check the IDs of customers and handle eNaira payments.

The eNaira wallet is set up and works like a bank account. But your eNaira wallet will be a separate account that is not linked to a bank account you already have. Both parties need an eNaira wallet for a transaction to go through. An eNaira wallet is a digital wallet that lets users store, send, and receive eNaira.

The eNaira is a type of digital money that is made by the government of Nigeria. It’s not a type of digital currency like Bitcoin, which is a cryptocurrency. The difference in size between the two values shows how reliable a coin is.

For example, one eNaira will be worth the same as one Naira. Because of this, its value will stay the same as Bitcoin’s, so you can’t invest in getting rich. The eNaira makes it easier to do digital transactions without keeping cash on hand as a backup currency. 

How will the eNaira Change the Economy as a Whole?

It needs to be clarified what effect, if any, using the eNaira would have on Nigeria’s economy.

On the other hand, the Central Bank of Nigeria (CBN) thinks that the eNaira would improve many things, such as getting more people to use money, making payments, and collecting taxes. The eNaira will make it easier for Nigeria to trade with other countries, which could benefit Nigeria’s economy.

Author: Ryan Green