The International Monetary Fund (IMF) has recommended that global crypto trading platforms should be registered or licensed in Nigeria and subject to regulatory requirements.
It made this recommendation in the latest IMF staff country report for Nigeria, warning that the rapid growth of foreign exchange (FX) trading platforms in Nigeria poses new challenges to the country’s financial stability.
The IMF also noted that Nigerian authorities took significant steps at the end of February to address issues surrounding cryptocurrency trading platforms.
The IMF also urged Nigerian authorities to strengthen anti-money laundering and combating the financing of terrorism (AML/CFT) preventive controls on crypto trading platforms. It emphasized the need for effective risk-based supervision of these platforms and other virtual asset service providers.
During discussions with the IMF team, the Nigerian authorities noted the need to stabilize the FX market through critical reforms.
Acknowledging mounting pressure on the exchange rate due to illicit flows via crypto platforms, the authorities highlighted the significance of maintaining external stability. They pointed out that recent reforms and efforts to attract FX liquidity, including a mandate requiring international oil companies to hold 50% of repatriated oil receipts in Nigeria for 90 days, were designed to achieve this goal.
The Nigerian government admitted that illicit flows through cryptocurrency platforms are exerting undue pressure on the exchange rate. Consequently, the authorities have moved to implement stricter controls on crypto platforms and reinforce compliance with existing FX regulations.
More Insights