ABCON talks collaboration, guidance with SEC on digital currency harmonisation

Business a.m.

The Association of Bureaux De Change Operators of Nigeria (ABCON) has reached out to the Securities and Exchange Commission (SEC) to propose a collaborative effort on harmonising the nation’s digital currency and peer-to-peer (P2P) forex sectors.

Aminu Gwadabe, the ABCON president, in a recent courtesy visit to Timi Agama, the newly appointed Securities and Exchange Commission (SEC) director-general, called attention to pressing challenges faced by the sector. 

Gwadabe highlighted the threat posed by unregulated online virtual transaction platforms that allow millions of Nigerians to engage in untraceable and unaccountable foreign exchange trading.

He underscored the organisation’s investment in technology to safeguard the future of Bureau de Change (BDC) businesses and maintain the integrity of the sub-sector. Recognising digital currency’s pivotal role in this future, Gwadabe expressed ABCON’s commitment to adapting to the evolving financial landscape.

The meeting with Agama and the SEC executive board was a follow-up to an earlier online consultation, reaffirming ABCON’s dedication to collaborating with regulatory bodies and promoting the sustainable growth of Nigeria’s financial sector through the adoption of digital currency and innovative technology, Gwadabe noted.

The meeting enabled the provision of insights into the organisation’s role as the leading representative body for all licensed retail foreign exchange dealers, established in 1991, as a liaison between regulatory authorities, key stakeholders, and security agencies to foster transparency in the retail foreign exchange market.

Gwadabe stated further: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about 9% with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual to individual transaction.

“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board, in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.

“Hence, 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 licence 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.”

Timi Agama the SEC DG responded with a robust understanding of the ABCON president’s speech. He said: “I understand that ABCON is desirous of setting up a digital market platform with the intention to be part of the emerging digital currency ecosystem in Nigeria. We at the SEC are open to help the sector grow for the love of the country therefore there will be meetings with the relevant departments of the SEC to detail methods and strategies that will strengthen the Naira through necessary innovative ideas as shared by ABCON.”

Agama emphasised the commission’s dedication to fostering local talent in the development of digital platforms and ensuring robust regulatory oversight of the virtual currency market.He also pointed out that new rules have been implemented to support the growth of locally-developed digital platforms and expressed the SEC’s willingness to collaborate with ABCON in achieving their shared objectives.

Given his extensive knowledge of the virtual currency market, Agama urged ABCON to expedite the finalisation of their proposed digital market model, Koletyomoni, and submit it to the SEC technical team for timely review. 

He acknowledged the presence of competing interests and emphasised the need for swift action in shaping the market’s future.

Furthermore, Agama underscored the government’s authority through the SEC and affirmed the commission’s readiness to exercise its powers to maintain order and stability in the issuance, marketing, and trading of securities within Nigeria’s capital market.

Oluwasegun Kosemani, technical partner of ABCON, expressed gratitude to the SEC DG and his experienced team for their warm reception and attentive engagement with the association.

Kosemani further informed the SEC of the substantial resources allocated for research and development of the platform and outlined plans to collaborate with key stakeholders in Nigeria’s blockchain and cryptocurrency ecosystem, such as BICCoN, CDIN, SIBAN, DCC, Bitcoin organisations, local peer-to-peer exchanges, and merchants.

Leveraging ABCON’s wealth of experience, operations, KYC, compliance, and AML capabilities, Kosemani highlighted the platform’s primary goal of harmonising data and ensuring that digital FX merchants operate under a transparent and legitimate framework. He explained further that the  collaborative approach seeks to discourage fraudulent activities and contribute to the government’s revenue through taxes on transactions facilitated by the platform, ultimately enhancing the overall transparency and convenience of the digital foreign exchange market in Nigeria.