Following a recent court ruling in Illinois that classified Bitcoin and Ether as commodities, Nigerian stakeholders are calling on the Nigerian Securities and Exchange Commission (SEC) to adopt a similar approach. This move aims to provide a tailored regulatory framework that reflects the unique characteristics of these digital assets.

Importance of Clear Guidelines

Lucky Uwakwe, chairman of the Blockchain Industry Coordinating Committee of Nigeria (BICCoN), emphasized the need for clear guidelines on crypto asset classification.

“The Nigerian SEC should make rules that define the asset class of crypto assets or break respective crypto into asset classes and explain to the public how such crypto qualifies to be called securities or commodities,” Uwakwe told.

He noted that while the US SEC and the Commodity Futures Trading Commission (CFTC) agree on classifying Bitcoin and Ether as commodities, the distinction between proof-of-stake (PoS) and proof-of-work (PoW) protocols could affect the classification of specific crypto assets.

Advocacy for Individual Scrutiny

Oladotun Wilfred Akangbe, chief marketing officer at Flincap, highlighted the multifaceted nature of cryptocurrency and the varied interest from multiple Nigerian governmental bodies, including the CBN, SEC, FIRS, and NSA. Akangbe stressed the need for distinct regulatory approaches for Bitcoin and Ethereum compared to other cryptocurrencies.

“Foundational cryptocurrencies such as Bitcoin and Ethereum have become very valuable commodities, and assets are priced in them,” Akangbe said.

He suggested that the SEC should primarily focus on using cryptocurrencies as fundraising instruments, such as initial coin offerings (ICOs).

Local crypto analyst Rume Ophi argued that each cryptocurrency is unique and should be scrutinized individually to determine whether it qualifies as a security or a commodity.

Path to Comprehensive Regulation

The stakeholders’ recommendations are crucial as Nigeria seeks to establish a comprehensive regulatory framework for digital assets. By considering Bitcoin and Ether as commodities, the Nigerian SEC can provide much-needed clarity and stability in the market, encouraging innovation while ensuring regulatory compliance.

This approach aims to position Nigeria at the forefront of the global financial landscape by providing a robust and clear regulatory environment for digital assets.