Following a recent court ruling in Illinois classifying Bitcoin and Ether as commodities, stakeholders in Nigeria are advocating for a similar approach from the Nigerian Securities and Exchange Commission (SEC) to enhance regulatory clarity.
This call for classification comes amidst the growing importance of cryptocurrencies in global finance.
Lucky Uwakwe, chairman of Nigeria’s Blockchain Industry Coordinating Committee (BICCoN), emphasized the necessity of defining crypto asset classes clearly.
In an interview with Cointelegraph, Uwakwe stressed, “The Nigerian SEC should make rules that define the asset class of crypto assets or break respective crypto into asset classes and explain how such crypto qualifies as securities or commodities.”
He noted the distinction made by the US SEC and the Commodity Futures Trading Commission (CFTC) regarding Bitcoin and Ether as commodities, while highlighting how protocols like proof-of-stake (PoS) or proof-of-work (PoW) could affect the classification of other crypto assets.
In Nigeria, however, the focus of the Commodity Board has traditionally been on physical commodities like agricultural products, with minimal attention given to digital commodities.
Oladotun Wilfred Akangbe, chief marketing officer at Flincap, a platform for African over-the-counter crypto exchanges, underlined the diverse nature of cryptocurrencies and the varied interest from Nigerian governmental bodies.
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“Cryptocurrencies like Bitcoin and Ethereum have become valuable commodities in global markets,” Akangbe remarked, advocating for distinct regulatory strategies tailored to these foundational cryptocurrencies compared to others.
Akangbe suggested that the SEC concentrate primarily on cryptocurrencies used for fundraising, such as initial coin offerings (ICOs).
Another local crypto analyst, Rume Ophi, argued for individual scrutiny of each cryptocurrency to determine its classification as a security or commodity, emphasizing their uniqueness.
These recommendations are pivotal as Nigeria seeks to establish a robust regulatory framework for digital assets.
By classifying Bitcoin and Ether as commodities, the Nigerian SEC can offer much-needed clarity and stability to the market.
This approach not only fosters innovation but also ensures adherence to regulatory standards.
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