Nigeria’s cryptocurrency community has welcomed Europe’s Markets in Crypto-Assets Regulation (MiCA) stablecoin regulations as a step in the right direction, emphasizing that it is critical for governments to put their interests in crypto projects first in order to safeguard their national currencies. Nigerian data and policy analyst Obinna Uzoije discussed his ideas on what the Economic Community of West African States (ECOWAS) may learn from Europe’s MiCA in an interview with Cointelegraph. He emphasized the many benefits that each of the member states of ECOWAS would receive from the regulatory framework surrounding cryptocurrencies.
Stablecoins are now the most common use case for cryptocurrency assets, according to Uzoije. He claims that more stablecoin transactions than any other sort of digital asset occur in Africa specifically. In light of this, the “Stablecoins Regime” implemented by the MiCA, which goes into effect on June 30, is a critical turning point for the regulation of digital assets in Europe and possibly beyond.
This legislation mandates that issuers and other entities get a MiCA license, without any transition time, in order to openly offer or trade e-money tokens (EMTs) or asset-referenced tokens (ARTs) within the European Union. Bola Tinubu, the president of Nigeria, is currently leading ECOWAS, which presents Uzoije as the ideal time for the group to create a regulatory framework for cryptocurrency initiatives. Some ECOWAS nations, such as Sierra Leone, have strict regulations or complete prohibitions on cryptocurrency. These limitations might be lessened by an ECOWAS regulatory framework that applies to all 15 of its member nations.
A single regulatory framework that applies to all ECOWAS members will provide much-needed certainty for prospective cryptocurrency investors. According to Uzoije, ECOWAS-specific legislation would make it easier for members to make investments because there would be no need to adhere to several national laws. “By addressing regulatory uncertainty, one of the major global drawbacks of investing in cryptocurrencies, this could attract more investors.” Considering that the Nigerian authorities mentioned money laundering as a major problem with Binance in their ongoing disagreement, Uzoije said as much. In order to combat money laundering, ECOWAS should create a single regulatory framework that applies to all of its members.
According to Uzoije, this would make it easier to detect money laundering by cryptocurrency companies inside of ECOWAS. The main issue, terrorism, has also been connected to cryptocurrency financing. To combat terrorism financing, authorities would benefit from clear restrictions.