Nigerian SEC Chair Project Crypto to Onboard 38M Unbanked Population to Financial Sector

As Nigeria seeks to become the epicentre for crypto assets in Sub-Saharan Africa, the policymakers have expressed different views on digital assets. On Thursday, the director general of the Securities and Exchange Commission (SEC) in Nigeria, Emomotimi Agama, was pleased to state that crypto will benefit the unbanked population.

Factors Contributing to High Demand for Crypto in Nigeria

Addressing the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria, Agama expressed optimism that crypto adoption will exponentially grow. The executive projects that the crypto market cap will reach $52.5 million by 2028.  

At the moment, Nigeria has welcomed crypto assets positively. The surge in crypto adoption adversely affected the performance of the local currency Naira. For the past few months, the financial regulators have been exploring ways to restore the Naira’s stability against the dollar. 

The measures to prevent the devaluing of the Naira forced vital market players, including Binance, to cease operations in the West African country. Despite the measure, Nigeria ranks with the highest crypto-asset adoption in Africa. 

A recent report shows that the Nigeria crypto market reached $400 million. Driven by the need to attain financial freedom, Nigerians have actively engaged in buying and selling of sold crypto assets to generate an income . 

Role of Crypto to Financial Inclusion

During the interview, Agama noted that 33.4% of Nigeria uses or owns crypto assets. With the surge in crypto adoption, the executive believes that crypto assets offer numerous benefits to millions of unbanked Nigerians.

He predicts that crypto will boost the accessibility of financial services to the unbanked communities. Also, Agama admitted that some Nigerians do not have bank accounts but own crypto assets. 

Compared to traditional finance, the executive noted that crypto assets were more accessible. With the shift to digital payment Nigerians have been exploring cheap, fast and reliable methods to send money. 

Agama observed that crypto allows Nigerians to send money to people in the diaspora effortlessly. Citing recent statistics, Agama noted that Nigeria ranks as the leading country in remittance. 

This implies that crypto will allow Nigeria to transfer funds with lower remittance charges. Despite the benefits, Agama noted that crypto has shortcomings, just like other financial products. 

Nigerian SEC Chair Calls for Clear Crypto Regulation

The executive outlined the challenges facing crypto assets, such as lack of regulatory clarity and security concerns,. Agama noted that most countries are working to develop comprehensive regulations for crypto assets to protect the consumer from unfair business practices. 

He explained that the lack of clear regulation for crypto has exposed investors to huge losses. Also, he noted that regulatory uncertainty in crypto has encouraged criminals to take advantage of customers.

Agama encourages regulators to embrace friendly regulations supporting crypto-asset growth while addressing risks. He advised the policymakers to develop clear rules that are ease to comprehend and comply.

Agama urged the policymakers incorporate adequate security measures for crypto assets to combat cyber-related crimes.

Even though crypto popularity has gained momentum, Agama believes there is still a need to educate investors on the risks and benefits of these assets. The executive tasked the Nigerian policymakers with the role and responsibilities of maintaining a vibrant crypto sector by adopting friendly policies. 

Nigerian SEC Chair Supports Crypto

Having joined the Nigerian SEC in April, Agama demonstrated his pro-crypto stance.  The Nigerian President Bola Ahmed Tinubu appointed Agama, hoping the new commissioner would stimulate economic growth and restore customers’ confidence. 

He also managed to lead the SEC in regulating the capital market. The Nigerian crypto community positively welcomed Agama’s appointment. 

A statement from the chief executive of Flincap, Nathaniel Luz, was pleased to state that the appointment of a crypto commissioner will bring positive changes to the digital world.

Luz vowed to collaborate with the new SEC chair to harmonize the Nigerian licensing processes for crypto assets. The executive anticipates Agama will help investors and businesses obtain crypto licenses in  Nigeria.