Nigeria’s Central Bank Plans to Regulate Bitcoin

The growing popularity of Bitcoin in Asia has led some governments and financial authorities to consider crypto regulation. In particular, the Central Bank of Nigeria ( CBN ) is looking to propose a set of regulations to protect consumers and digital currency investors.

As in parts of Asia and South America, a large portion of Nigeria’s population is unbanked, leading to the rise in alternative methods of moving money. South American bitcoin exchange ICE3X already made cryptocurrency trading possible in Nigeria when Singapore-based BitX entered the market earlier this year.

Bitcoin Regulation in Africa

As bitcoin-related businesses in Africa are just beginning to develop, a regulatory framework for bitcoin, such as New York’s BitLicense , has yet to be established. However, Joseph Nnanna , vice president of the CBN’s financial system stability department , said at a conference that bitcoin regulation could help maintain financial stability and prevent cryptocurrencies from being used for illegal purposes.

Bitcoin transactions are anonymous, so users do not need to be contacted or approved when buying or selling the cryptocurrency. Verification is done by a computer that solves complex algorithms through a process called bitcoin mining , which creates new entries into the blockchain, or public ledger of transactions.

This form of anonymity has made Bitcoin popular in underground markets, such as the now-defunct Silk Road , a site that sold drugs and conducted illegal transactions through the dark web. For Bitcoin enthusiasts, establishing a regulatory framework for Bitcoin transactions can help remove this stigma and make Bitcoin-related operations legal in the country.

In addition, other countries in Africa will follow Nigeria in developing their own regulatory frameworks. Many multinational organizations and charities can get more donations and funds through Bitcoin transactions.