The International Monetary Fund (IMF) has recommended that global crypto trading platforms should be registered or licensed in Nigeria and subject to regulatory requirements.
IMF made this recommendation in the latest IMF staff country report for Nigeria warning that the rapid growth of foreign exchange (FX) trading platforms in Nigeria poses new challenges to the country’s financial stability.
“Staff recommends that global crypto trading platforms be registered or licensed in Nigeria and subject to the same regulatory requirements applicable to financial intermediaries following the principle of same activity, same risk, and same regulation.”
The IMF also urged Nigerian authorities to strengthen anti-money laundering and combating the financing of terrorism (AML/CFT) preventive controls on crypto trading platforms. It emphasized the need for effective risk-based supervision of these platforms and other virtual asset service providers.
In talks with the IMF team, Nigerian officials conveyed the necessity of stabilizing the foreign exchange (FX) market through essential reforms. They pointed out the escalating pressure on the exchange rate stemming from illicit flows through cryptocurrency platforms and the authorities underscored the importance of preserving external stability.
They highlighted that recent reforms and initiatives aimed at attracting foreign exchange (FX) liquidity such as the directive requiring international oil companies to retain 50% of repatriated oil receipts in Nigeria for a period of 90 days, were crafted with the aim of attaining this objective.
According to the Nigerian government, illicit flows via cryptocurrency platforms are placing unwarranted pressure on the exchange rate. As a result, the authorities have taken steps to enforce stricter controls on crypto platforms and enhance compliance with current foreign exchange regulations.
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“There was a meeting of crypto founders on Tuesday [February 27 2024] morning, and a number of them agreed to suspend the trades on their platform,” a person at that meeting told a local… pic.twitter.com/iiYBuYrpOu
— BitKE (@BitcoinKE) February 29, 2024
“The authorities agreed with the importance of maintaining external stability and emphasized that the reforms which they have implemented as well as efforts to bring in FX liquidity – including the requirement for international oil companies to hold 50 percent of repatriated oil receipts in Nigeria for 90 days – are geared towards that end.
They see pressure on the exchange rate now coming from illicit flows, including through crypto asset platforms, and not being driven by fundamentals, noting that some ceilings on FX access are intended to curb abuse.”
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