Nigeria has expressed willingness to allow the existence of private stablecoins in the country with its most recent central bank policy document noting the need to establish a legal framework for stablecoins.
The Central Bank of Nigeria (CBN) research, titled “Nigeria Payments System Vision 2025,” is 83 pages long and examines the creation of a legal framework for the future introduction of a stablecoin. Given that stablecoins are likely to succeed as a payment system in the nation, the paper claims that a framework has to be created.
The regulation of initial coin offerings is also covered in the paper (ICOs). It emphasizes how there is now no regulation in the region, which resulted in losses for the investors.
The CBN, however, sees promise for ICO adoption as a fresh method of crowdfunding, peer-to-peer lending, and capital project finance. As a result, “in the case of acceptance of an ICO-based investment solution,” a regulatory framework is also required.
The report’s section on stablecoins and initial coin offerings, however, is much shorter than the one devoted to the Nigerian CBDC, eNaira. It may “allow change” in the national economy, according to the Central Bank. In three to five years, it wants to have the currency fully operational.
In an effort to further its “cash-less Nigeria” strategy and promote the usage of the eNaira, Nigeria has cut the amount of cash that individuals and companies may withdraw to $225 and $1,125 each week, respectively, as of December 2022.
Since its debut in 2021, a CBDC has had a low adoption rate. Less than 0.5% of the population was estimated to have used the eNaira as of October 25, 2022.
