Absa Nigeria, a leading pan-African bank with a strong footprint across the African continent, has commended the Nigerian Securities and Exchange Commission (SEC) for proactively providing a regulatory framework for investing and trading digital assets, including cryptocurrencies.
Sadiq Abu, CEO of Absa Nigeria, gave this commendation while speaking during the “Power Lunch Show” on CNBC Africa on Monday. He also lauded the commission for recognising digital assets as securities.
Following the Central Bank of Nigeria’s (CBN) circular in February 2021, digital assets like crypto exchanges in Nigeria have been banned from working with financial institutions.
But industry experts believe the latest developments from the SEC could act as the precursor for a surprise move from the CBN to reverse its approach, providing critical foundations for mass crypto adoption across the country.
SEC, the regulator of the Nigerian capital market, had over the weekend published a new guideline on Issuance, Offering Platforms and Custody of Digital Assets, fulfilling the promise it made last year to examine the digital currency to gain a better understanding and develop regulations to protect investors.
To this end, Abu said, “SEC decided to be proactive around cryptocurrency and digital assets. The SEC has realised that these are rightly called securities and further created a framework to bring them within the broader securities’ regulatory framework in Nigeria.
According to him, the SEC has also created a framework for protecting investors by requiring investments to be held by digital assets custodians and acknowledged that exchanges or platforms for trading digital assets needed to be regulated.
“There is also an overarching framework for regulating all participants that play in the digital assets space through a specialised license called Virtual Assets Services provider.”
He pointed out that a new rule stipulating tenure and other qualifications of the Chief Executive Officer and Principal Officers of Digital Assets Offering Platforms was similar to the regulations of the Central Bank of Nigeria (CBN).
According to him, this is a clear indication that the SEC and CBN worked together to develop the new framework for the operation of digital assets.
He stated, “There is clear evidence that the SEC is working hands in glove with the CBN to create a regulatory framework for the operation of digital assets and the regulation of CEOs and Principal Officers fall under the broader approved persons regime of the SEC”
Absa, offers investment banking and market products through its various Nigerian registered subsidiaries, namely Absa Representative Office Nigeria Limited, Absa Capital Markets Nigeria Limited, and Absa Securities Nigeria Limited.
