Lagos, May 17, 2024 – The Association of Bureau De Change Operators of Nigeria, ABCON, has sought the collaboration and guidance of the Securities and Exchange Commission, SEC, in harmonising the digital currency P2P FX sector in Nigeria.
Alhaji Aminu Gwadabe, President, ABCON, made the plea during a curtesy visit of the executives of ABCON to the newly appointed Director-General of SEC, Dr Timi Agama in Lagos.
Gwadabe used the occasion to congratulate the D-G on his appointment by President Bola Tinubu.
ABCON noted that in recent years, the digital money market in Nigeria has experienced significant growth and development.
It said that with the emergence of virtual currency fintech startups and the increasing adoption of blockchain enabled payments, Nigerians are embracing digital currencies as a convenient and efficient way to transact.
“However, there is still a need to harmonise and regulate this emerging market.
“This is where the Bureau de Change comes in. The Bureau de Change, BDC, has long been a familiar sight in Nigeria’s financial landscape. These licensed entities specialise in foreign exchange transactions, buying and selling currencies to individuals and businesses.
“With their established infrastructure and expertise in currency exchange, BDCs are well-positioned to play a key role in harmonising the digital money market.”
Gwadabe quickly highlighted that SEC regulates the sector that is a threat to the continued existence of BDCs in Nigeria through online virtual transactions platforms which gives access to millions of Nigerians to trade in foreign exchange without trace and accountability.
He also explained that ABCON has invested in requisite technology to ensure the continued existence of the business and preserve the integrity of the sub-sector.
He argued that the future of BDC’s business is digital currency.
The ABCON Chief said that the meeting with the SEC D-G and the present executive board of SEC was a follow up on the earlier online virtual consultation.
Gwadabe took time to explain the vision and mission of ABCON.
He noted that ABCON is the umbrella body for all licensed retail foreign exchange dealers which came into existence in 1991.
“Our objective is to liaise with our regulators, relevant stakeholders and security agencies as one cannot divorce the retail exchange market from the ecosystem of foreign exchange market seeing that BDC market is global and have been in operation before our independence. It has been there before the creation of the Central Bank of Nigeria.
“The system came under regulation in 1986 during the administration of former President Ibrahim Babangida, who felt the need to formalise the sector through the issuance of licenses by the then ministry of finance with the objective to formalising the informal sector,” Gwadabe said.
He noted that as at today there is over 34 million Nigerians dealing in digital currency and the number is rising by about 9 per cent with a huge market of $9billion annually.
According to him, there are thousands of multichannel virtual currency fx platforms and none is indigenous to Nigeria.
He said that P2P represents individual to individual transaction.
He emphasised that innovation can only be guaranteed on trust.
He said that over the years, ABCON has embraced technology by upgrading its systems;
And has engaged technical partnership with Koletyomoni with the intention to capture fiat/digital money.
“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities and Exchange Board, in building the platform knowing that they have sources of foreign exchange.
“Lack of liquidity is the reason for the advent of Bitcoin, Binance and all the unlicensed platforms, Gwadabe said.
The president said that ABCON was willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.
He said that in line with changing global business trends and ABCON’s compliance efforts towards technological innovation, the association on behalf of its membership would be pleased to be granted license to operate in digital currency transactions.
“This would entail that whoever has USDT and wants to trade it should approach licensed BDCs for their transactions,” Gwadabe said.
He stated that ABCON as a critical player in the market have developed solutions and models, noting that what we call international standards were tailored towards the cultures of those societies which developed them.
He noted that there was the need to balance what we call international obligations and national objectives and as such we should not always rely on international models and neglecting our peculiarities.
Gwadabe recommended that Inter-agency collaboration needs to be encouraged, adding hat there was need .to create a working committee.
He added that there should be the provision of job for our teeming youth population through technology.
In his response, Dr Timi Agama, D-G SEC said that he had noted the desire of ABCON to set up a digital market platform with the intention to be part of the emerging digital currency ecosystem in Nigeria.
Agama said that SEC was open to help the sector grow for the love of the country.
According to him, there will be meetings with the relevant departments of SEC to detail methods and strategies that will strengthen the Naira through necessary innovative ideas as shared by ABCON.
The SEC DG also said that there are new rules put in place to accommodate local intellectuals to develop digital platforms, adding that SEC will cooperate with ABCON to achieve the desired objectives.
The D-G, who is highly knowledgeable about the virtual currency market, directed that the proposed ABCON presentation and the development of ABCON digital market model, Koletyomoni, be finalised as quickly as possible and be forwarded to SEC technical team for study and timely review.
Dr Timi did not forget to emphasise on the powers of the government (SEC) and that the agency will not hesitate to use its powers where necessary to keep sanity in the issuance, marketing and trading of securities in Nigeria’s capital market.
Also speaking, ABCON’s technical partner Mr Oluwasegun Kosemani expressed gratitude to Dr Timi and his team for their warm reception.
He said that much resources have been allocated to the research and development of the platform.
He noted that ABCON was collaborating with every emerging verifiable blocks of the blockchain and cryptocurrency ecosystem in Nigeria like and local peer to peer exchanges and merchants etc.
He explained that ABCONs wealth of experience, operations, KYC, Compliance AML all combined in developing the platform.
According to him, the main objective of the platform is to harmonise data, ensure all digital FX merchants whether USDT, crypto-bitcoin come under a very viable and visible platform.
He said the platform would promote transparency, discourage foul play and government would receive substantial revenue from the transparent legitimate transactions the platform would be facilitating by way of convenience of use, tax paid by the operators and clients.
ABCON stressed that BDCs have the potential to play a significant role in harmonising the digital money market in Nigeria.
“By leveraging their existing infrastructure and expertise, BDCs can provide liquidity, security, and convenience to individuals and businesses participating in the digital economy.
“With the right regulatory framework in place, BDCs can help drive the growth and development of the digital money market, benefiting the Nigerian economy as a whole.”
