The International Monetary Fund (IMF) has advised that global cryptocurrency trading platforms be registered or licensed in Nigeria and subject to regulatory oversight.
In the most recent IMF staff country report for Nigeria, it issued this advice and cautioned that the country’s financial stability is facing new difficulties due to the fast expansion of foreign exchange (FX) trading platforms in Nigeria.
The IMF also mentioned that at the end of February, Nigerian authorities took important action to resolve problems related to bitcoin trading platforms.
The report said as follows: “Staff suggests that international cryptocurrency trading platforms should register or obtain a license in Nigeria and be bound by the same regulatory requirements that apply to financial intermediaries, in accordance with the principle of same activity, same risk, and same regulation.”
The IMF also recommended that Nigerian authorities bolster the preventive measures against money laundering and the financing of terrorism (AML/CFT) on cryptocurrency trading platforms. It highlighted how important it is to effectively supervise these platforms and other suppliers of virtual asset services using a risk-based approach.
FG claims that illegal flows via cryptocurrency platforms put pressure on the exchange rate. The Nigerian authorities brought up the need for crucial measures to stabilize the foreign exchange market during their meetings with the IMF delegation.
The authorities emphasized the importance of preserving external stability while acknowledging that illicit movements through cryptocurrency platforms are putting increasing pressure on the exchange rate.
They noted that this objective was intended to be attained by recent reforms and initiatives to draw foreign exchange liquidity, such as a mandate forcing international oil corporations to retain 50% of repatriated oil receipts in Nigeria for 90 days.
The Nigerian government acknowledged that the exchange rate is being unduly impacted by illicit transfers via bitcoin platforms. As a result, the government has taken action to strengthen adherence to current FX laws and impose stronger controls on cryptocurrency platforms.
The report said as follows: “The authorities emphasized that the reforms they have put in place and their efforts to bring in foreign exchange liquidity—such as the requirement that international oil companies hold half of their repatriated oil receipts in Nigeria for a period of 90 days—are directed towards maintaining external stability. They also agreed that maintaining external stability is important. They observe that illegal movements, particularly those via platforms for virtual assets, are currently putting pressure on the exchange rate rather than fundamentals, emphasizing that various restrictions on FX access are meant to stop abuse.”
