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Bitcoin is gaining popularity worldwide; the idea of cryptocurrency was conceived to provide an alternative to centralized finance. Many people in the world use cryptocurrencies for hassle-free and relatively cheap overseas transactions. Many countries are considering the deployment of Bitcoin as a legal tender. El Salvador became the first country to deploy BTC as legal tender on September 6, 2021, followed by the Central African Republic on April 23, 2022. Now Nigeria is looking to be a part of that BTC club.
Chairman of the House of Representatives Committee on Capital Markets and Institutions of Nigeria, Babangida Ibrahim, per a local newspaper, claimed that the country should soon pass a law that will legalize the use of Bitcoin and other cryptocurrencies. The bill would be an amendment to the 2007 Investment and Securities Act and shall recognize BTC as legal capital for investment.
Although Nigeria banned the use of Bitcoin in February last via with a letter prohibiting regulated financial businesses from “dealing” with cryptocurrencies, during the same year, the media reported that the country was on its way to clock the largest volume for BTC peer-to-peer trading in the world. Reports show the massive adoption of BTC by the African country.
Ibrahim pointed out that Nigeria is quite behind in implying regulation for the industry, and if the country is to stand on the global podium, global practices should be applied.
If the proposed regulation properly addresses the growing BTC usage in the country, it shall be a major catalyst for the most populated nation in Africa.
Although BTC was banned until now, cryptocurrency has had a fairly wide presence in the country. They even built a Bitcoin Village where Nigerian bitcoiners participate in all sorts of philanthropic work and development from BTC companies. Also, BTC mining is an active industry in the country.
The US Department of Treasury’s Financial Crime Enforcement Network (FinCEN) has been issuing guidance for BTC usage since 2013. It has defined Bitcoin as a convertible currency with an equivalent value in real currency.
The European Union has recognized BTC and other cryptocurrencies as crypto assets. However, it’s not illegal to use Bitcoin within the European Union.
Canada has maintained a friendly stance on cryptocurrency, whereas Canada Revenue Agency (CRA) views Bitcoin as a commodity. Any income from BTC transactions shall be viewed as capital gains or business income and should be taxed and reported as such.
The Australian Taxation Office also considers Bitcoin as a financial asset. Any transaction, be it buying, selling, gifting etc., will be levied with capital gains tax.
Other countries where Bitcoin is legal are Denmark, France, Germany, Japan, Iceland, Spain, Mexico and the United Kingdom.
The above countries have legalized the use of Bitcoin but in limited capacities, and none have installed the cryptocurrency as their legal tender.
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