Collaboration among key financial and technology regulators like the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), and the National Information Technology Development Agency (NITDA) would strengthen risk management for Digital Assets. The Chief Operating Officer of the Fintech Association of Nigeria, Dr. Babatunde Obrimah, made this point while providing insight into the Securities and Exchange Commission’s recent statement on regulating Digital Assets, including blockchain.
He said the association through its “Reguvators” forum has focused on advocacy for collaboration, coordination, and cooperation amongst the regulators in the financial and capital market.
Speaking further he stressed that the forum that has only been held once since inception was designed to bridge the gap between regulators and innovators.
According to him “Part of the intention of the reguvators forum is to ensure that regulation does not stifle innovation in the financial and capital market. It also has the potential to solve a lot of issues within the ecosystem.”
He agreed with the notion that the management of the risks from digital assets like cryptocurrencies was geared towards addressing the following concerns;
- Economic Impact
- Consumer Protection and
- Investor Protection
On addressing the issues around crypto-assets, he noted that the SEC rules contained in section 13 of the 2007 Investments and Securities Act (ISA) provide a regulatory framework for the oversight of digital assets; he called on issuers or sponsors of digital assets to register with the regulator.
Obrimah also emphasized the need for APIs (Application Programming Interface) that link crypto accounts to the Nigerian Financial Intelligence Unit (NFIU) to ensure periodic tracking and reporting of transactions in digital assets.
With the regulatory incubation framework established by the SEC for the capital market, he said that several fintech firms were already participating in the sandbox.
Apart from that of SEC Nigeria, Dr. Obrimah acknowledged the CBN sandbox which has opened but harped on effective implementation.
He noted that SEC and CBN’s sandboxes were vital to the processes of awarding licenses to operators and approving products, specifically designed for the capital market.
Following the directive of the CBN restricting banks from carrying out transactions with cryptocurrencies, the COO of the Fintech Association of Nigeria said the next “Reguvators” forum on February 23, 2020, will be an opportunity to discuss the issues and seek a pathway for resolution.
Also, he said the association was working out modalities to collaborate with the National Pension Commission (PENCOM) amongst other financial regulators to create the enabler for harnessing local funding of Fintechs in Nigeria.
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