• Nigeria is creating a legal framework for stablecoins and ICOs.
• The Central Bank of Nigeria’s strategy paper outlines the need to develop a framework for stablecoins.
• The document also notes the current absence of regulation in ICOs and the potential for adoption of ICOs as a new approach to fundraising.
The Central Bank of Nigeria (CBN) recently released a strategy paper titled “Nigeria Payments System Vision 2025”, which addresses the need for a legal framework for stablecoins and initial coin offerings (ICOs). Nigeria is one of the world’s pioneers in adopting its own central bank digital currency (CBDC).
The paper outlines the need to develop a framework for the potential usage of stablecoins. It notes that stablecoins are likely to become a successful payment mechanism in the country, and so a proper legal framework is needed to ensure the safety of these transactions. The document also pays attention to the regulation of ICOs.
At present, there is no regulation in the area of ICOs, leaving investors vulnerable to losses. However, the CBN sees potential for ICOs to become a new approach to fundraising, peer-to-peer lending and crowdfunding. A proper regulatory framework is necessary to ensure the security of investments and transactions.
The strategy paper also outlines the need to create a secure and reliable payments system in Nigeria. The CBN will be working with the country’s financial institutions and other stakeholders to ensure that the payments system is safe and efficient. The paper also notes the importance of consumer protection, stating that consumer interests must be taken into account when developing and implementing the payments system.
The CBN is looking to the future, ensuring that the payments system is ready to adopt new technologies, such as distributed ledger technology (DLT) and artificial intelligence (AI). The CBN also plans to upgrade its existing payment systems and introduce new ones, such as mobile money and digital wallets.
Overall, the CBN’s strategy paper outlines the need for a legal framework for stablecoins and ICOs, as well as the development of a secure and reliable payments system. This will ensure that the payments system is ready for the future, and that investors and consumers are protected.