SEC to introduce license for crypto, virtual assets providers

The Security and Exchange Commission is set to introduce licences for service providers of virtual assets like cryptocurrencies in a bid to protect investors amid the reality of global acceptability of digital currencies and in Nigeria.

The development was disclosed by the Director-General of SEC, Emomotimi Agama in an interview with Bloomberg on Tuesday, stating that the first batch of licences for digital and tokenized assets could happen this month.

“Being a crypto and fintech enthusiast, I can tell you this is going to happen sooner than expected. We must support the youth of this country in harnessing the benefits that fintech offers. The market is vast and continues to grow,” adding that it’s a global best practices that SEC is the regulatory agency of digital markets.

According to him, the development also aligns with global markets such as in Europe, South Africca and Botswana to the extent that they oversee the digital asset class, according to Bloomberg.

The need for a digital environment, Agama explained that the Central Bank of Nigeria’s ban on banks facilitating crypto transactions was due to concerns over exchange rate manipulation and the naira’s depreciation.
He added that the SEC’s decision underscores the need for a structured environment where digital transactions can be conducted transparently.

However, the Central Bank of Nigeria had reversed its stance on crypto assets and instructed banks to disregard the earlier ban on crypto transactions.

Agama noted that the SEC’s aim is to create a regulated platform for crypto activities while ensuring that digital currencies are not used to undermine the naira.

He strsssed that the regulator’s approach will focus on transparency, investor protection, and maintaining stability in the financial system.

Investors in cryptocurrencies may be required to establish the offices in the country as part of requirement to obtaining licences.