Nigeria: Naira Is in Crisis but Cryptocurrency Isn't to Blame - Nigeria Needs Consistent Policy

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Analysis - Nigeria's Securities and Exchange Commission is considering tighter controls to combat illegal trading in digital assets, including cryptocurrencies. The Conversation Africa asked Iwa Salami, a researcher in regulatory frameworks for crypto-assets, to explain how best Nigeria can manage cryptocurrency.

controls to combat illegal trading in digital assets, including cryptocurrencies. The Conversation Africa asked Iwa Salami, a researcher in regulatory frameworks for crypto-assets, to explain how best Nigeria can manage cryptocurrency.is a digital representation of a value or of a right. It can be transferred and stored electronically using distributed ledger technology. This is technology that allows multiple parties to share and update a common ledger without relying on a central authority.

Cryptocurrencies exist outside the control of governments and central authorities. In theory, they are immune to government interference or manipulation. Cryptography ensures secure online payments without intermediaries. Although intangible, cryptocurrencies hold value based on market demand and adoption.ease of access backtracked

Nigeria needs a balanced approach to regulation if the industry is to thrive without harming financial and monetary stability. AIf Nigerians were prevented from trading the naira on cryptocurrency exchanges, they might turn to other assets denominated in US dollars. That would be worse for the naira.of being used in illegal activities like money laundering and the drug trade.

International standards also enable regulators to get information from foreign exchanges providing wallets to their citizens. So, in an ideal world, if regulators adopt international standards for crypto-asset activities these concerns should be addressed. For example, the Financial Stability Board hasthat regulatory authorities share information on suspicious transactions on foreign cryptocurrency exchanges.

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