Cryptocurrencies in Nigeria: A Legal Analysis

Abstract

Cryptocurrencies, the talk of the town, have emerged as a subset of alternative currencies to fiat currencies. Representing money in digital form, they differ, markedly, from conventional currencies as well as digital payment services or mediums. Formally introduced in 2009 with the advent of Bitcoin (the first and basic cryptocurrency), this genus of currency has waxed stronger as there are now no less than a thousand different types of cryptocurrencies globally. Despite this increasing escalation of cryptocurrencies, its reception as well as legal status varies considerably across Jurisdictions. Whilst some countries have clearly permitted their use and trade, others have restricted them or proscribed them outright. Yet some others are yet to definitively define their attitude to them. Even among countries that have taken a stand on cryptocurrencies, the nature of their classifications of cryptocurrencies differs. These issues, coupled with concerns of an unregulated global economy associated with cryptocurrencies, have made cryptocurrencies more topical now than ever before. It is against this background that this article seeks to analyse the emergence of cryptocurrencies in commerce and investments in Nigeria, and its legal implications. Towards this end, this article shall first clarify and expound on what cryptocurrencies are, including their various types, their operations and how they differ from conventional currency system. Afterwards, we would examine cryptocurrencies as currency or money and thereafter undertake a review of current Nigerian currency laws with a view to discern whether and to what extent cryptocurrencies are or could be accommodated under current Nigerian law. We would next examine the response of Nigerian regulators to the emergence of cryptocurrencies in Nigeria and then appraise the reception and treatment of cryptocurrencies across varying national jurisdictions. Finally, we would conclude the article and make recommendations as may be necessary. This paper contends that, ultimately, there is more to be done at the international level to address the challenges posed by this staggering invention as local treatments of the challenges might not suffice.