Nigeria’s Securities and Exchange Commission (SEC), through a statement, established its position on digital currencies. According to the government entity, cryptocurrencies and derivatives are considered stock assets like any other listed on the stock market.
It is a decision that gives a one-way vision to cryptocurrencies. In this sense, the SEC assures that it is firm and until the contrary is proven, digital currencies will be considered as stock assets.
It should be noted that the repercussions of this legal status enacted in Nigeria can be varied. For example, all actions that involve cryptocurrencies are subject to approval and regulatory guidelines.
Stock assets and cryptocurrencies will have the same treatment
The measure of equating cryptocurrencies with stock assets, encompasses any type of exchange asset based on the Blockchain. At the same time, within it, the issuance of tokens and their management are included, explains the statement from the regulatory body.
This is a striking move, given the economic potential that Nigeria represents. However, it is not the first time that a similar regulation has been proclaimed in Africa.
Among the nations that have already taken steps in the same direction is South Africa. That nation released a documented statement last April. In it, they ask all token offers to adhere to the official legislation of the country.
According to CoinDesk, the measure of the Nigerian authorities has a clear purpose. It is about equating the status of cryptocurrencies to that of stock assets to control foreign offers.
Avoid risks for investors
Another objective pursued by the measure, the SEC explains in the aforementioned document, is to protect investors. “It is essential that such offerings operate in a manner consistent with the protection of investors, the public interest and the stability of the markets.”.
Likewise, he continues, the objective of the measure to equate cryptocurrencies with stock assets, is not to boycott technological innovation. On the contrary, it is about “orient it towards ethical practices that ultimately lead to an efficient way of operating markets”.
According to the regulatory laws of the country, all assets related to innovation or the stock market must comply with 3 standards. They are, build on security, deepen the market and troubleshoot.
Leaving cryptocurrencies loose and outside of national laws, they consider, can be harmful to market stability. At the same time, it could put public and private assets at risk, leaving investors without adequate protection.
Who precisely do these measures cover?
It should be noted, that a large part of digital currencies are decentralized and difficult to “put on the lane”. For this reason, applying the same rules to cryptocurrencies as to stock assets seems a challenge.
However, all people or companies related to the medium must be registered with state agencies. From those that provide mining, custody and transmission services, etc.
Another aspect to take into consideration is that, with the aforementioned legislation, some requirements may be made to foreign entities. For example, “the commission may require foreign or non-resident issuers or sponsors to establish a branch in Nigeria”.
Data to take into consideration
- Nigerian government authorities seek to establish control over cryptocurrency companies.
- The law seeks to “protect” public and private investors, as well as to maintain market stability.
- Cryptocurrencies would be considered at the same level as stock assets, and the deal will not change “until proven otherwise.”
- Nigeria is not the first country to enforce regulations against the irruption of cryptocurrencies. South Africa and has taken steps in this direction.
The information in this content has been extracted from reliable sources that are detailed below:
1- Professional handling of content by the authors of CriptoTendencia.
2- External sources: CoinDesk.com and Sec.gov.ng.