SEC reacts to CBN’s ban on cryptocurrency transactions
The Securities and Exchange Commission (SEC) has reacted to the placement of ban on all forms of cryptocurrencies by the Central Bank of Nigeria (CBN) last week.
The commission explained that there is no policy conflict between the capital market apex regulator and the CBN over the ban placed on Bitcoin transactions in the banking industry.
This was contained in a statement issued by the SEC, saying that contrary to the perceived policy conflict from some quarters, it saw no such contradictions or inconsistencies.
The statement read: “The primary objective of the Statement was not to hinder or stifle innovation, but to establish standards of ethical practices that ultimately make for a fair and efficient securities market.
“The SEC made its statement at the time, to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.
“Subsequently, in its capacity as the regulator of the banking system, the CBN identified certain risks, which if allowed to persist, will threaten investor protection, a key mandate of the SEC, as well as financial system stability, a key mandate of the CBN.”
It further explained that therefore, “we have engaged with the CBN and agreed to work together to further analyse, and better understand the identified risks to ensure that appropriate and adequate mitigants are put in place, should such securities be allowed in the future.”
According to the statement, the SEC, clarified that in respect of the implementation of SEC’s Capital Market FinTech Strategy:
- For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021 is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system.
- The planned implementation of the SEC Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.
The apex capital market regulator promised to continue to monitor developments in the digital asset space and further engage all critical stakeholders with a view to creating a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market.