Technology Times has confirmed that the Federal Government has backed Blockchain technology under plans to allow cryptocurrency trading in Nigeria and promote transactions in virtual currencies like Bitcoin.
Hitherto, the Central Bank of Nigeria (CBN), which says cryptocurrency trading in Nigeria had no legal backing when the banking regulator in 2017 warned that variants of virtual currencies like Bitcoin, Monero, Litecoin, Dogecion, Onecoin among others “are not legal tender in Nigeria, thus any bank or institution that transacts in such businesses does so at its own risk.”
A similar stance was shared by Securities and Exchange Commission (SEC) in 2017 when the Nigerian capital and financial market regulator citing solicitations by cryptocurrency operators had warned that because the “instruments and the persons, companies or entities that promote them have neither been authorized, nor any guidelines/regulations developed for them by any of the regulatory authorities in Nigeria, there is no protection available to users or investors in these virtual currencies from financial losses if the virtual currencies fail or the companies promoting them go out of business.”
Meanwhile, the Nigerian IT regulator has outlined a new roadmap for the country’s public sector to adopt Blockchain technology as one of several strategies to evolve the country’s Digital Economy as envisaged by President Muhammadu Buhari.
The National Information Technology Development Agency (NITDA) in the landmark move says the IT regulator has started developing a blueprint and strategy document for the “National Adoption of Distributed Ledger Technology (DLT)/Blockchain in Nigeria.”
The IT regulator has followed the announcement with the release of the Draft National Blockchain Adoption Strategy that charts Nigeria’s ambitious vision to “use Blockchain technology as a platform for the transition into a digital economy.”
NITDA says the strategy was “developed with the purpose of using Blockchain as one of the emerging technologies for the transition into a digital economy. Its main aim is to drive adoption of blockchain technology in public administration, leading to improved efficiency, transparency, and accountability in governance and to open job creating opportunities in the transformation agenda of a digital economy.”
The strategy for the Blockchain adoption is built on the six key initiatives that include: 1) Establishment of Nigeria Blockchain Consortium. 2) Strengthening of the Regulatory and legal framework. 3) Focus of the provision of National Digital Identity. 4) Promotion of Blockchain digital literacy and awareness. 5) Creation of Blockchain business incentive programmes. 6) Establishment of a national blockchain sandbox for proof of concepts and pilot implementation.
Cryptocurrency trading in Nigeria: Government Enabling Landscape
According to NITDA, the key regulatory frameworks, policies, strategies, and guidelines providing support for emerging technologies such as blockchain to thrive and foster adoption by the public sector include:
The National Digital Economy Policy and Strategy has been developed to reposition the Nigerian Economy to take advantage of the many opportunities that digital technologies provide.
The development of a digital economy will create new technological platforms and industries on one hand, while enhancing the efficiency and productivity of existing industries on the other.
This strategy and policy aligns with the 8 pillars of the ‘DIGITAL NIGERIA’ Roadmap of the Federal Ministry of Communications and Digital Economy (FMoCDE). It is also a key enabler and driving force for adoption of the current digital age emerging technologies to drive a digital economy.
The goal of the National ICT Policy is to provide a framework for streamlining the ICT sector and enhancing its ability to catalyse and sustain socioeconomic development. It seeks to transform Nigeria to a knowledge-based economy through digital transformation.
The policy outlines key focus areas in which blockchain technology could thrive when adopted by the key stakeholders. Policy focus Areas:
I. Policy, Legal, Regulatory Framework
II. Internet and Broadband
III. Capacity Building
IV. ICT and Youth
V. Safety and National Security
VI. Coordinated ICT Development across all sectors
VII. Research, Development, and Innovation
VIII. Investment and funding
IX. Public Private Partnership
X. Open Data and ICT.
The overall purpose and rationale of the e-Government Master plan is to strengthen the efficiency and transparency of public administration service.
Its vision is to create a world class open and digitized government that connects with people to drive efficiency in public administration, responsiveness of civil services and transparency in governance leading to improvement of the quality of life of Nigerians.
This policy contributes to this goal by enabling the Nigerian Government (or public sector) access to cloud computing and other technologies enabled by the cloud, such as Artificial Intelligence, Blockchain, Machine Learning or IoT, among others.
This is essential for the creation of an environment that spurs development and innovation in an organic way.
The Nigerian National Broadband Plan 2020-2025 has several initiatives that are aimed at improving Broadband penetration in Nigeria, overcoming challenges with the deployment of a national fibre optic-based network to distribute approximately ten terabytes of capacity already delivered to landing points in Nigeria.
The Nigerian Communications Commission (NCC) has pegged the current broadband penetration in the country at 37.87%, indicating a 7-percentage point increase from the 30% broadband target of 2018.
The Federal Government’s target is to grow the country’s Broadband penetration to 70% by 2023 and to ensure that all parts of the country are provided high-speed Internet connectivity for equitable distribution of the benefits of the digital economy.
Data security and privacy is a major concern globally due to cyberattacks being on the rise in size, sophistication, and cost.
The Nigerian Data Protection Regulation states the measures that entities must take to safeguard and protect private individual data.
As blockchain technology is built in a decentralized fashion, with nodes running in different jurisdictions. Benchmarking this strategy against the regulation stipulated by the NDPR becomes necessary to ensure synergy and compliance.