IMF Urges Nigeria to License Global Cryptocurrency Exchanges

In this post:

  • The IMF has advised Nigeria to license global cryptocurrency exchanges to integrate them into its financial system and boost its standing in the African crypto market.
  • The recommendation includes enforcing strict AML/CFT measures for crypto platforms, aiming to enhance compliance and secure financial transactions.
  • Concurrently, Nigeria’s SEC is tightening crypto regulations, including banning peer-to-peer exchanges using the naira and dealing with compliance issues involving major crypto exchanges like Binance.

The International Monetary Fund (IMF) has suggested that Nigeria license global cryptocurrency exchanges as a part of its economic reforms to position the country in the African cryptocurrency market.

The agency also asked the Nigerian government to integrate cryptocurrencies into its financial system. 

In this regard, the IMF is of the view that permitting global crypto trading platforms to be registered or licensed in Nigeria would integrate them with regulatory requirements applicable to financial intermediaries. 

Improving Compliance and Financial Stability

Furthermore, the IMF strongly suggests the use of strict Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) to control crypto trading platforms and other virtual asset service providers in the country. The agency said that enforcing these actions should be through efficient risk-based supervision aimed at increasing compliance and protecting investors’ money. 

The report also points out significant discrepancies in Nigeria’s balance of payments, highlighting unrecorded financial transactions, particularly from crypto assets used for cross-border transactions.

The report reads: “ Global crypto trading platforms should be registered or licensed in Nigeria and subject to the same regulatory requirements applicable to financial intermediaries following the principle of the same activity, same risk, and same regulation.”

Nigerian Regulatory Changes and Cryptocurrency Exchanges

The recommendation from the IMF occurred at a time when Nigeria’s Securities and Exchange Commission (SEC) was instituting tighter regulations with respect to cryptocurrency operations. The Nigerian SEC has taken recent measures to prohibit peer-to-peer (P2P) cryptocurrency exchanges with the national currency, which is the naira, in a bid to safeguard it from potential manipulation. This is a component of the overall approach to enhance the management of digital financial flows and reduce illicit financial flows. 

At the same time, the Nigerian SEC is grappling with compliance issues in regard to major crypto exchanges such as Binance. Recent activities have also included the arrest of a Binance executive.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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