Nigerian SEC Approves Busha And Quidax – A Milestone In Crypto Regulation With ARIP’s First Two Successes

Sean Williams

On August 29, the Nigerian Securities and Exchange Commission (SEC) made a landmark announcement, granting “approval in principle” to two leading digital asset exchanges, Busha Digital Limited and Quidax Technologies Limited. This move marks a historic moment for the Nigerian crypto market, being the first approvals issued under the SEC’s newly introduced Accelerated Regulatory Incubation Program (ARIP). This initiative is set to play a pivotal role in nurturing growth within the local cryptocurrency sector while ensuring adherence to regulatory standards.

A Framework for Growth – The Accelerated Regulatory Incubation Program

The ARIP is designed to streamline the entry of digital asset exchanges into Nigeria’s burgeoning market. It allows selected firms to operate under provisional approval while awaiting the finalization of comprehensive digital asset regulations. This forward-thinking framework is intended to provide a safe and regulated environment for both investors and innovators. Alongside the approved exchanges, the SEC has also selected five additional firms for its Regulatory Incubation (RI) program, including notable platforms like Trovotech Ltd and Wrapped CBDC Ltd.

Embracing Distributed Ledger Technology

Central to the SEC’s strategy is the emphasis on distributed ledger technology (DLT). This technology is fundamental to the operation of many cryptocurrencies, providing a foundation for secure and transparent transactions. The SEC has highlighted that the outcomes of the preliminary tests conducted under the ARIP and RI programs will significantly influence future regulatory policies. This proactive approach aims to harmonize innovation with investor protection, setting clear guidelines for participants in the evolving digital finance landscape.

Rigorous Review and Investor Guidance

The SEC is meticulously assessing additional digital asset exchange applications, with plans to extend similar approvals to entities that meet regulatory compliance standards. The commission has also issued a warning to the public, advising caution against unverified and unauthorized investment services in the cryptocurrency space. This guidance is crucial for maintaining market integrity and ensuring that both novice and experienced investors operate within a secure framework.

The SEC’s recent actions signal a broader commitment to legitimizing the cryptocurrency market in Nigeria. By establishing robust regulatory frameworks and fostering innovation through programs like ARIP, the SEC aims to create a transparent and secure trading environment. As the cryptocurrency ecosystem continues to expand, it is essential for all stakeholders, including regulators and investors, to engage with evolving policies and practices to ensure a sustainable market.

Also Read: Bridge Secures $58M Funding To Revolutionize Global Payments – SpaceX, Coinbase Onboard Amid $168B Stablecoin Market Surge

The Nigerian SEC’s recent approvals represent a significant milestone in the country’s cryptocurrency journey. By implementing strategic regulatory measures and promoting the use of cutting-edge technologies, the commission is laying the groundwork for a more structured and transparent market. With these advancements, the future of cryptocurrency in Nigeria looks bright, characterized by regulatory clarity and increased participation, setting the stage for a more secure and dynamic digital asset landscape.

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Panama City to Accept Crypto Payments, But Settled in US Dollar

Mayer Mizrachi, the mayor of Panama City, Panama, announced today that the city government will accept payments in crypto. It will accept Bitcoin, Ethereum, and two stablecoins for taxes, permits, fees, etc.

However, Mizrachi clarified that the municipal government has a legal requirement to accept these funds only in USD. It will exchange cryptoassets for cash with a partnered bank, presenting a severe limit to potential crypto adoption.

Is Panama City Accepting Crypto?

In the last few months, a tide of pro-crypto regulation has swept over many of the world’s jurisdictions. This obviously includes the United States at the federal and state levels, but many other countries are rising to the occasion.

Case in point, the mayor of Panama’s capital city just announced that the municipal government will accept payments in crypto.

“Panama City council has just voted in favor of becoming the first public institution of government to accept payments in crypto. Citizens will now be able to pay taxes, fees, tickets and permits entirely in crypto starting with BTC, ETH, USDC, USDT,” claimed Mayer Mizrachi, the mayor of Panama City.

Mizrachi went on to explain some previous efforts to accept crypto payments in Panama. Four years ago, a legislative initiative tried to enable crypto payments all over the country.

It got some traction but eventually stalled out in 2022. In 2023, the Supreme Court ruled the bill “unenforceable.” Since then, it doesn’t seem like any other serious efforts have made progress.

Panama City’s municipal government is circumventing the legislature to accept crypto payments, but the strategy has significant drawbacks. Mizrachi explained that public institutions must receive funds in US dollars, and he couldn’t circumvent this requirement.

In other words, any crypto payments will actually go to a partnered bank. The bank will actually custody (or dispose of) these assets, while the city only holds USD. Mizrachi’s effort avoids a contentious legislative battle, but its actual impact might be severely limited.

Although Panama has its own currency, the balboa, the US dollar has more legal standing in a few different ways. It’s a legal tender; public institutions have to accept it, and the balboa is actually pegged to the dollar anyway.

This is a very similar situation to what made El Salvador accept Bitcoin as a currency, as it also had to use the US dollar as its sole currency.

Mizrachi explained that this short workaround will increase “the free flow of crypto” through Panama’s economy, but it may not be that simple. Depending on the agreement between the city government and partnered banks, it could just dump its cryptoassets on the international market.

If Panama wants to actually adopt cryptocurrency, it may need more sustainable measures integrated to the local economy.

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