Nigeria to Create the Stablecoins and ICOs legal Framework

The need to Create a legal Framework for Stablecoins is set apart in the latest Central Bank of Nigeria strategy paper.

As one of the world’s pioneers in adopting its own central bank digital currency (CBDC), Nigeria pronounces its readiness to acknowledge the presence of private Stablecoins also. The need to create a legal framework for Stablecoins is set apart in the latest Central bank strategy paper.

Distributed under the title “Nigeria Payments System Vision 2025”, the 83-page report from the Central Bank of Nigeria (CBN) considers the improvement of a regulatory framework for the likely implementation of a stablecoin. According to the report, there is a need to foster a framework, considering that stablecoins are probably going to become a fruitful payment system in the country.

The report focuses on the regulation of initial coin offerings. It features the ongoing shortfall of regulation nearby, causing the investors’ losses. However, the CBN sees potential for adopting ICOs as a new way to deal with raising money for capital projects, peer-to-peer lending and crowdfunding. Consequently, a regulatory framework is also required “in case of adoption of an ICO-based investment solution.”

However, the stablecoins and ICOs segment of the report is ways less than the one dedicated to Nigerian CBDC, eNaira. The Central Bank considers it a potential “empowering agent for transformation” in the national economy. It desires to accomplish a last implementation of the currency in 3-5 years.

In December 2022, Nigeria has reduced the amount of cash people and businesses can pull out to $225 and $1,125 each week, separately trying to push its “cash-less Nigeria” strategy and increment the utilization of the eNaira.

Since its launch, adoption rates for a CBDC have been low. The CBN has attempted to convince its residents to utilize the digital currency, with under 0.5% of the population detailed having involved the eNaira as of Oct. 25, 2022, a year from its launch.