Call for Regulation of Bitcoin and Ethereum as Commodities in Nigeria
Date: 2024-07-16 Author: Gabriel Deangelo Categories: IN WORLD
Following a recent court decision in Illinois, US, which classified Bitcoin and Ethereum as commodities, crypto industry players in Nigeria are urging the country's Securities and Exchange Commission (SEC) to implement a similar approach in its regulatory framework.
The Growing Role of Cryptocurrencies
The call for clarity and proper classification of cryptocurrencies comes amid their increasing importance in the international financial system. Lucky Uwakwe, Chairman of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), stressed the importance of clearly defining crypto assets and their role in the market.
Uwakwe noted that clear rules and classifications would help developers and investors better understand where they should go for regulation. He stressed that the Nigerian SEC should develop rules that clearly define classes of crypto assets, explaining to the public why a certain cryptocurrency can be classified as a security or a commodity.
Classification of Crypto Assets
According to Uwakwe, although the US Commodity Futures Trading Commission considers Bitcoin and Ethereum to be commodities, the distinction between proof-of-stake and proof-of-work protocols could impact the classification of specific crypto assets. However, in Nigeria, the Commodities Board has traditionally focused on physical commodities such as agricultural products and has not yet shown interest in digital assets.
Oladotun Wilfred Akangbe, Chief Marketing Officer of Flincap, an African over-the-counter cryptocurrency exchange platform, highlighted the multifaceted nature of cryptocurrencies and the interest from various government bodies in Nigeria. He noted that major cryptocurrencies such as Bitcoin and Ethereum have become highly valuable commodities in which assets are valued. Akangbe also suggested that the SEC should focus on the use of cryptocurrencies as fundraising tools, such as initial coin offerings (ICOs).
Individual Approach to Each Cryptocurrency
Rume Ofi, a local cryptanalyst, argues that each cryptocurrency is unique and requires individual analysis to determine its classification as a security or commodity. He emphasized that the correct classification of crypto assets is necessary to ensure stability and trust in the market.
The recommendations from market participants come as Nigeria seeks to create a comprehensive regulatory framework for digital assets. By classifying Bitcoin and Ethereum as commodities, the Nigerian SEC could provide greater clarity and stability to the cryptocurrency market, which in turn would help attract investors and develop the industry in the country.
