Two Nigerian regulatory bodies, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), have agreed to conduct research to regulate and govern the sector’s booming Bitcoin and crypto market.

An opportunity for Nigeria

As per a report on local outlet Premium Times, the two bodies made the decision at a lecture held the past weekend. Nigeria ranks among the world’s top Bitcoin and crypto markets by usage, with a significant chunk of its citizens reportedly using the asset as a store of value and transfer instead of their local fiat.

Timi Agama, head of markets at the SEC, said the nearly $2 trillion-large cryptocurrency market could not be ignored (the market cap has since fallen by $500 billion). He said Nigeria would remain “static” while the world “moves forward” if the country failed to regulate the sector.

“There is a lot of investment move into the cryptocurrency market and the tendency is that it will reduce the number of investments in the stock market,” said Agama, stating that a robust regulatory structure would help avoid the various challenges that cryptocurrency adoption faces around the world. He added that such a move would, in addition, also help attract foreign investments into the local crypto market.

“A market that has an opportunity for ICOs, derivatives, is not a market we can ignore,” he said.

The SEC head noted that regulators must collaborate and analyze to create a level playing where Nigerians and international investors betting on the long-term growth of cryptocurrencies remain “comfortable and happy.”

However, he added that the SEC would not allow any fraudulent practices that facilitated money laundering—a concern that the crypto market is notorious for.

The case for Bitcoin

The comments come on the back of Nigeria’s strong growth and adoption of Bitcoin and other cryptocurrencies in recent months. The country is the world’s second-largest Bitcoin market in terms of real volumes and usage, a recent report by peer-to-peer exchange Paxful had found (the report was based on Paxful’s own trading volumes).

Paxful said that Nigerians made a quarter of its customer base with over 1.3 million registered accounts. “They mostly use the platform for peer-to-peer and arbitrage trading,” noted Nena Nwachukwu, a regional manager at the firm. He added remittances were another major use case, especially as they were cheaper to use compared to centralized fiat alternatives.

With regulators on their side, the future looks bright for Nigeria’s young, crypto-loving population.

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