What does Nigeria’s regulatory change mean for Bitcoin adoption?


Heritage Falodun, a Bitcoin consultant and computer scientist based in Nigeria, wrote an opinion editorial about the Nigerian government’s approval of the official use of blockchain technology in the country. This approval was given during a federal executive council meeting on May 3, 2023, presided over by President Muhammadu Buhari at the council chamber in Abuja. The minister of communications and digital economy, professor Ali Isa Pantami, announced the official approval of “The National Blockchain Policy For Nigeria,” which was created through consultations with 56 institutions and personalities to institutionalize blockchain technology in Nigeria’s economy and security sectors.


Nigeria’s History With Bitcoin Regulation

The Central Bank of Nigeria (CBN) issued a circular on January 12, 2017, cautioning financial institutions and the general public about the risks associated with blockchain-dependent technologies, such as Bitcoin. The CBN officially prohibited banks from facilitating any Bitcoin- and crypto-related transactions on February 5, 2021, with a reissued circular that has not been reversed yet. This restrictive policy fueled the use of Bitcoin and stablecoins as users discovered the power of decentralized Bitcoin innovations, like peer-to-peer (P2P) marketplaces.

Meanwhile, the CBN created a government-controlled digital currency called the e-naira, which was launched on October 25, 2021, built on a centralized system, not a decentralized blockchain like Bitcoin’s. Nigeria’s Security And Exchange Commission (SEC) created policy frameworks for token-issuance platforms and exchanges. All these regulatory changes were due to the government’s awareness of how thriving the blockchain industry is in Africa’s most populous country.

Source : A draft of Nigeria’s “ Nation Blockchain Adoption Strategy ”

What Does This Mean For Bitcoin In Nigeria?

This recent policy and federal approval is crucial for the Bitcoin space in Nigeria and Africa at large. It is focused on giving a direct government overview to relevant regulatory bodies such as the National Information Technology Development Agency (NITDA), CBN, SEC, the Nigerian Communications Commission (NCC), and the National Universities Commission (NUC), among many others who are now expected to develop more detailed regulatory frameworks from using blockchain-based innovations like Bitcoin. The government is moving from being totally repelled by or antagonistic about Bitcoin-, blockchain- and crypto-related activities to now accepting them by default and creating a regulatory environment for them to move forward. Bitcoin uniquely repels such regulations and consistent clarity from governments will help in driving adoption and create an enabling environment for Nigerians to incorporate decentralized blockchain technology, like Bitcoin, into scaling their businesses and ways of life, while opening numerous legal opportunities for everyone.

Stay tuned to the industry’s developments, as Nigeria’s President-Elect, Bola Tinubu, has pledged to promote the responsible use of blockchain technology and cryptocurrencies in the country’s banking and financial sector. I am eagerly awaiting the full implementation of Bitcoin-friendly regulations in Nigeria.

This is a guest post written by Heritage Falodun. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.