Regulators in Nigeria have officially recognized crypotocurrencies. This was announced by the SEC (Security Exchange Commission) of Nigeria on September 15, 2020 who have now defined assets under its regulatory umbrella.
Bitcoin is already legal in Nigeria.
Many have cautioned it will increase fraud related activities in Nigeria.
What are the Dangers of Using Cryptocurrency?
For investors, what can wrong with cryptocurrencies? In regular times, not much. First, the brokerage of crypto-assets is something new, and a body of self-regulating norms has not evolved yet.
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Paper protection mechanisms may be lacking also because these brokerage houses are not regulated (although that may change soon because a recent FATF recommendation calls for the government to step in). In short, investors can be defrauded, harmed, hacked or swindled.
Second, crypto-assets price can float abruptly. Investors may lose (but also gain) fortunes. In theory, stablecoins minimize this risk; Facebook’s Libra, in particular, would dramatically minimize volatility if it should ever come to exist.
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Third, market manipulation is always a possibility, and there is no guarantee that the crypto-assets brokers themselves will not be involved. So there are risks – and yet, what in life doesn’t? When we factor in the potential for gains in asymmetric trades such as Bitcoins, it all sounds like a reasonable bet.
