Nigeria’s crypto community is excited about Europe’s new Markets in Crypto-Assets Regulation (MiCA) stablecoin rules. They see it as a positive step that could help protect their local currencies and encourage the growth of crypto projects.
Nigerian data and policy analyst Obinna Uzoije shared his views with Cointelegraph, pointing out the benefits that the Economic Community of West African States (ECOWAS) could gain by adopting a similar regulatory approach.
Uzoije highlighted that stablecoins are currently the most widely used type of crypto assets. He noted that in Africa, especially, there are more transactions using stablecoins than any other digital asset.
With the MiCA’s “Stablecoins Regime” taking effect on June 30, this regulation marks a significant step in crypto asset regulation in Europe and potentially beyond.
Nigerians see opportunity in MiCA’s framework
The new MiCA rules mean that issuers and other entities must obtain a MiCA license to offer or trade asset-referenced tokens (ARTs) or e-money tokens (EMTs) within the European Union. There is no transitional period for these rules.
Uzoije believes that under President Bola Tinubu’s leadership, ECOWAS has the perfect chance to create a similar regulatory framework for crypto projects in West Africa.
“This could attract more investors by addressing regulatory uncertainty, one of the significant global drawbacks of crypto investment.”
Obinna Uzoije
Some ECOWAS countries, like Sierra Leone, have strict or outright bans on cryptocurrencies. A unified regulatory framework across ECOWAS’s 15 member states could help ease these restrictions.
It would offer potential crypto investors much-needed clarity and simplify investments across the region by eliminating the need to comply with multiple national regulations.
Nigeria’s crypto market growth despite challenges
Despite significant regulatory uncertainties, Nigeria’s cryptocurrency market has surged above $400 million.
This was highlighted by the Director General of the Security and Exchange Commission (SEC), Emomotimi Agama, during the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria in Abuja.
Agama noted that Nigeria’s crypto transaction volume reached $56.7 billion between July 2022 and June 2023, representing a nine percent year-over-year growth.
The market’s worth is estimated at over $400 million, with a huge portion of the population involved in cryptocurrency trading and transactions.
“The lack of a comprehensive regulatory framework has created uncertainty, which can deter both investors and innovators. Cybersecurity threats, including hacking and fraud, pose significant risks. A substantial portion of the population lacks adequate financial literacy, making them vulnerable to scams and risky investments.”
Agama
He pointed out that approximately 33.4 percent of Nigerians were actively involved in crypto trading, indicating strong market penetration.
However, Agama also highlighted several challenges, including regulatory uncertainty, security concerns, and financial literacy issues.
In February, the Central Bank of Nigeria expressed worries about the large volume of transactions going through crypto exchange platforms from unidentified sources.
The bank reported that $26 billion passed through Binance Nigeria last year from unidentified sources.
Jai Hamid
