The most populous nation on the African continent, Nigeria, has finally officially revealed that it intends to publish a legislative framework that would regulate stablecoins and initial coin offerings (ICOs), a recent report from the country’s central bank shows.
Given that stablecoins have a good chance of becoming a successful payment method in the nation, the report asserts that there is a need to establish a framework in order to accommodate this possibility.
The Central Bank of Nigeria (CBN), on the other hand, believes that initial coin offerings (ICOs) have the potential to become a novel method of financing capital projects, peer-to-peer lending, and crowdfunding. As a result, the adoption of a solution for investment that is based on an ICO necessitates the establishment of a regulatory framework.
If implemented properly and supported with the right rules and regulations, ICOs could be turned into Financial Instruments and Investment Options, creating a new way to attract Foreign Direct Investment (FDI) and raise capital.
Central Bank of Nigeria
Nigeria’s central bank says blockchain is innovative
The central bank acknowledged in its report that digital currencies built on the blockchain or distributed ledger technology (DLT) are technical and economic innovations.
These innovations have the potential to enable value transfers to be made quickly and inexpensively without the need for a central intermediary, and they also have the potential to improve trust, simplicity, operational efficiency, and customer experience.
The CBN has said that it would keep researching and developing the conditions necessary for the successful deployment of a CBDC. In order to encourage innovation, the bank will explore whether or not API integration on CBDC is applicable.
The central bank views it as a possible catalyst for reform in the economy as a whole. It anticipates that full implementation of the currency will be possible within three to five years.
Potential Smart Contract solutions would be watched in other nations and/or regions, and a plan would be developed if or when viable use cases were found in other locations.
The bank promises to consult with key stakeholders to research and put into action potential solutions for remittances that make use of blockchain technology.
In order to collaborate with these industry stakeholders, the bank says it is going to prepare a position paper that will identify prospective use cases, implementation techniques, and deadlines.
