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FIRS push for a comprehensive crypto law

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By Usman Oladimeji

Proposed legislation seeks to streamline and update current tax laws.

The Federal Inland Revenue Service (FIRS), Nigeria’s Tax regulatory body, is pushing to introduce a comprehensive new law that would govern cryptocurrencies in the nation. The announcement was reportedly made by the Executive Chairman of FIRS, Zacch Adedeji, at a recent stakeholder engagement meeting with the Finance Committees of the National Assembly. FIRS plans to introduce the new law in September as part of a larger initiative to restructure Nigeria’s tax structure. Adedeji claims that the new bill will deal with the expanding Cryptocurrency market, making sure that its advantages are maximized for the Nigerian Economy and also minimize any possible risks.

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Adedeji underlined the significance of regulating cryptocurrencies, pointing out that an extensive and unambiguous set of regulations is required to safeguard the economy. In order to create and execute the proposed laws, he urged for cooperation between the FIRS and MPs. With an emphasis on cryptocurrencies, the new Legislation seeks to streamline and update current tax laws—some of which are obsolete and unsuited to the changing needs of the modern digital world. The fast growing Digital Economy and the requirement for updated legal frameworks to maintain up with technical improvements are the reasons for the new call for regulations.

Nigeria’s stance on cryptocurrencies has changed over time.

This move coincides with the growing recognition of the significance of digital assets by the Nigerian government. Last month, Wale Edun, the Coordinating Minister of the Economy and Minister of Finance of Nigeria, encouraged the newly appointed Securities and Exchange Commission (SEC) board to address the challenges associated with regulating cryptocurrencies. The SEC has already started to modify its regulations regarding the issuing of digital assets, offering platforms, exchanges, and custody. These revisions are to improve the regulatory framework and increase its adaptability to the changing dynamics of the digital asset markets.

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Moving forward, the newly appointed board members are anticipated to be crucial to the regulatory transition process. The Nigerian government and regulators have also been encouraged by the cryptocurrency community to regulate digital assets responsibly rather than using clampdowns. Nigeria’s stance on cryptocurrencies has changed over time, reflecting the country’s attempts to control the quickly expanding digital asset market while striking a balance between Innovation and worries about Security and stability of the financial system.

SEC established rules governing crypto exchanges.

Blockchain Technology and cryptocurrency adoption have expanded dramatically in Nigeria in subsequent years, indicating a burgeoning enthusiasm in digital assets among Investors and businesses. However with the current drama involving Binance in Nigeria, navigating Blockchain and cryptocurrency laws in the country has taken on an intricate new dimension. The CBN was able to lift its previous ban on banking services for Virtual Asset Service Providers (VASPs) when Nigeria’s Money Laundering Act 2022 became practical. This is the first legislative acknowledgement of virtual assets in Nigeria.

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CBN established a regulatory sandbox for payment systems utilizing Fintech and blockchain innovation in 2023. Fintech companies and financial institutions can test new blockchain-based goods and services in a controlled environment that ensures compliance with current regulations thanks to the regulatory sandbox. This project shows that the CBN is open to support blockchain technology development and welcome innovation in the financial industry. In 2024, the Securities and Exchange Commission established rules governing cryptocurrency exchanges that are present in the nation.

Related Article: Nigeria should address crypto misconceptions

These regulations set forth licensing requirements and compliance standards for cryptocurrency exchanges in an effort to improve investor protection and market integrity. The SEC’s action gives Nigerian cryptocurrency exchanges operating in the country clarity and regulatory stability, which strengthens and opens up the country’s cryptocurrency sector. This is a complete shift away from the SEC’s June 9, 2023, directive, which instructed Binance to cease seeking Nigerian investors and cautioned them against purchasing cryptocurrency assets. Notwithstanding the latest policy changes, businesses and investors still face challenges while navigating Nigeria’s regulatory environment regarding cryptocurrencies and blockchain technology.

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