Nigeria’s Securities and Exchange Commission (SEC) does not plan to include cryptocurrencies in a plan to improve trading in digital assets until regulators agree on standards that protect investors. 

According to Director-General Lamido Yuguda, the commission is avoiding cryptocurrencies as crypto exchanges do not have access to the banking platform that is needed to drive their trades in Nigeria yet.

He stated, “We are looking at digital assets that really protect investors, not necessarily crypto.”

The SEC’s stance clarifies whether cryptocurrency was covered by its rule on the trade of digital assets, which was passed in May. According to Paxful, a peer-to-peer cryptocurrency trading platform, young Nigerians are responsible for the majority of bitcoin transactions outside of the US. However, the central bank has prohibited lenders from enabling cryptocurrency trades in order to protect the financial system.

According to Bloomberg, the SEC will promote investment in sensible digital assets with investment protection and also explore blockchain technology to advance virtual and traditional investment products.

Speaking about the volatility concern in cryptocurrencies, Yuguda also noted, “The commission is in the business of protecting investors, not in the business of speculation.” 

He also highlighted that the commission is sidestepping digital currencies for now however, cryptocurrencies are not explicitly banned in Nigeria, although the Central Bank of Nigeria has instructed banks to not engage in or with entities involved with cryptocurrencies and to close the accounts of those involved in crypto transactions.

According to research by price tracker CoinGecko, Nigerians have expressed more interest in cryptocurrencies than any other nation since the slide of digital assets started in April.  As the digital assets market undergoes development, crypto may be promoted by the SEC in the future. Additionally, now any asset that is traded in the Nigerian capital market requires the joint approach of different regulators.

The Nigerian regulator joins Singaporean, Hong Kong and South Korean market regulators in trying to define what assets fall under the term “digital asset.”