By Isaac Toluwashe Adeyanju[1]
![image](/2020/10/lawreport.jpg")
INTRODUCTION.
![image](/2020/10/NWLRland.jpg")
With the recent global awakening of online commercial markets
across the economies of the earth, also came a corresponding
increase in the rate of online business and commercial transactions
across African economies, with values of Online commerce in Africa
expected to reach $29 billion in 2022.
To set the right perspective, the pertinent question to however
answer is where does Nigeria stand in this recent online market
surge across global markets, and indeed African markets, with her
acclaimed recognition and pride as the Giants of Africa, and her
prowess in the African commercial markets? Has her status as a
commercial key player in the Afro-economics of the world
transmogrified into her very involvement in online
commercialization or can we say otherwise? It is without
gainsaying, that Nigeria has earned the recognition as one of the
biggest internet economies in Africa, with statistics showing an
overwhelming 250.7 million visitors to our online marketplaces in
2019 alone largely owed to the spread of internet services, the
enormous populace and technological progression.
With the recognition of the above facts, also comes the
recognition of the Symbiotic relationship that has been developed
across the years, between online commercialization and Digital
currencies, with the latter gaining startling relevance in the
instances of online commercial transactions across the world
today.
The evolution of Digital currencies in online transactions, is
one that has happened quite naturally, this has been attributed to
the effortless advantage, sustained when Digital currencies, is
employed as legal tenders in online commercial transactions.
Among the numerous reasons canvassed for the huge embrace of
Digital currencies as legal tenders for online commercial
transactions, is the enviable instances of its speed, security,
privacy, transparency and affordability of the charges associated
with it.
Another prevailing advantage that has recently sustained the
Digital currency narrative as a chief accomplice in successful
online commercialization in the 21st century, has been
the recent role played by Digital currencies, to facilitate the
ease of doing business during the Corona-Virus era, a lot has been
witnessed of how Digital currencies, persisted in sustaining online
business transaction, while financial institutions where locked
down, liquidated and unable to continue business due to the
pandemic. This has doubtlessly added to the credence of virtual
currencies, above other currencies in the occasion of online
transactions today.
LEGAL RECOGNITION OF DIGITAL CURRENCY IN NIGERIA, WHERE
DO WE STAND?
Amidst the wide acclamations in the recognition of Digital
currencies among the league of currencies known to business
transactions, several legal climes across the world, have made
considerable efforts to provide legal frameworks for the smooth
recognitions of Virtual currencies, for diverse purposes. Some
legal systems, have recognized digital currencies for the purposes
of taxation, while others have done considerable much to recognize
digital currencies as a medium for business transactions, and the
remaining climes have maintained reluctance in their legal
recognition of digital currencies, or outrightly forbidden virtual
currencies. Just like their African counterparts, Nigeria has
joined the league of countries who have tacitly rejected the idea
of digital currencies, in commercial transactions.
The stance of Nigeria, was given credence, when the Central Bank
of Nigeria, issued a Circular to
Banks and other Financial institutions on Virtual currency
operations in Nigeria. In the above circular, the CBN, decried
gross disadvantages that accompanies the use of digital currencies,
where it noted:
Transactions in
Virtual Currencies
are
largely untraceable and
anonymous
us
making them susceptible to abuse by criminals, especially in money
laundering and financing of terrorism. Virtual currencies are
traded in exchange platforms that are unregulated, all over the
world. Consumers may therefore lose their money without any legal
redress in the event these exchangers collapse or close
business.
Further to the above, the Nigerian Deposit Insurance Corporation
(NDIC) further warned, that Nigerians will not be afforded consumer
protection and insurance from its institution, when trading on
crypto currencies as virtual currencies where it noted that, “no
central bank will accept digital currency as a substitute for its
national currency or part of its monetary system, when it is not
able to control it”
While the above is true, it is respectfully noted, that law
exists as a dynamic machinery of social engineering necessary, to
govern and address new trends, changes and curves in human
interactions with one another. With particular respect to the Cyber
Crimes Acts legal means could be exploited under this enactment, to
cure the above mischief and make the Nigerian commercial landscape
a better and favorable place for investors. Moreover, it is
dangerous to leave an area of human interaction, without a legal
civilization and regulation, as this will give perceived criminals
a fun filled day in manipulating such areas in their favor, just as
it is kindly noted, Nature abhors Vacuum. Furthermore, it
is noted, that where there is no law defining a wrong or an
offence, there can be no commission of such wrong or offence, and
no corresponding punishment or remedy from the courts to curb that
mischief and further develop such emerging curve.
Recently however, the Security and Exchange Commission, sequel
to its powers under Section 13 of the of the Investment and
securities Act (2007) as the primary regulators of Nigeria’s
Capital market and investment frameworks, and consequent to such,
on the 14th of September 2020, issued a notice
recognizing virtual crypto assets, virtual tokens, blockchain based
offers of digital assets and other digital currencies within the
confines of “Securities”, unless the contrary is proven.
While the above development, is a laudable development and a
plausible shift from the previous position of the Central Bank of
Nigeria, it shows Nigeria’s readiness to position itself in the
league of digital economies in the world. However, moving forward,
more must be done in developing and widening the curve in the legal
recognition of Digital currencies in Nigeria, as a legal tender and
a means of transfer of value for commercial transactions in
Nigerian commercial market, beyond the restrictive approach of
recognizing them as Securities, for the following reasons:
- Lower commercial charges and fees,
- Quicker movement and flow of funds,
- There is little or no inflation,
- Secured modes of exchange and transfer of funds,
- Global commercial reach and trade network,
- Transparency and confidentiality among commercial players.
CANADIAN LEGAL RECOGNITION OF DIGITAL CURRENCY,
MODELLING THE ADOPTION OF A LEGAL ENVIRONMENT FOR DIGITAL
CURRENCIES, TO THRIVE IN NGERIAN COMMERCIAL MARKETS.
While it has been carefully noted above, that Nigeria has in
recent days, done laudably to reposition itself favorably to
harness the treasures accessible for her economy through digital
financing and currency, it is important to take a cue from
developed economies, who have leveraged on the medium of digital
currencies, to grow their economy. Below, we will quickly look at
the Canadian legal system, as a model for Nigeria’s adoption of
crypto currency in commercial transactions.
The Canadian government, recognizes and allows the use of crypto
currencies and other digital currencies, as a means of buying goods
and services in Canada. Furthermore, the purchase and sale of
digital currencies on open exchanges, called digital currencies
exchanges or crypto currencies exchanges are allowed. However,
digital currencies are not recognized as the official currencies of
Canada, under the Canadian Currency act.
Digital currencies are also subject to taxations in Canada, as
they are considered as a commodity used for money service business,
and barter transactions. They are also subject to income taxes
under the Income Tax Act, where they are used for the purchase of
goods and services.
Interestingly, mining of cryptocurrencies can be undertaken for
profit or otherwise in Canada, and such are subject to taxes under
Section 10 of the Income Tax Act. In determining the payable tax,
consideration is placed on the inventory per year.
They have been notable for the adoption of the world’s first
national law on digital currencies and for pioneering the treatment
of digital financial transactions under the ambit of their
antimoney laundry laws.
CONCLUSION.
It is kindly noted, that with the harsh realities, which the
Corona Virus pandemic has left behind for the Nigerian economy, as
other economies across the nations of the earth, the prevalent
certainties of economic recession and down turns, has left many
physical currencies without adequate values and purchasing powers
in the global market, during commercial transactions and the
Nigerian currency, has not been left untouched by this reality. It
is thus within reason, to consider the adoption of a legal
environment that recognizes and governs the free, fair and
equitable flow of digital currencies which have been known to have
exhibited resilience, in the midst of the corona economy, within
and without our commercial markets.
It is further noted, that with the recent ratification of the
African Continental Free Trade Agreement, and by effect the
unification of African market economies, digital currencies
provides a unified medium for the sale and purchase of commercial
commodities across African boarders and further affords a secured
free flow of financial resources across several nationalities in
Africa, thereby aiding Nigeria’s participation in the African cross
boarder market economy and ultimately, enriching our economy.
[1] Transactional Attorney, Tech
Lawyer, and Associate at O.M Atoyebi S.A.N &
Partners, E-mail Address:
adeyanjuizeek@gmail.com
By Isaac Toluwashe Adeyanju[1]
INTRODUCTION.
With the recent global awakening of online commercial markets
across the economies of the earth, also came a corresponding
increase in the rate of online business and commercial transactions
across African economies, with values of Online commerce in Africa
expected to reach $29 billion in 2022.
To set the right perspective, the pertinent question to however
answer is where does Nigeria stand in this recent online market
surge across global markets, and indeed African markets, with her
acclaimed recognition and pride as the Giants of Africa, and her
prowess in the African commercial markets? Has her status as a
commercial key player in the Afro-economics of the world
transmogrified into her very involvement in online
commercialization or can we say otherwise? It is without
gainsaying, that Nigeria has earned the recognition as one of the
biggest internet economies in Africa, with statistics showing an
overwhelming 250.7 million visitors to our online marketplaces in
2019 alone largely owed to the spread of internet services, the
enormous populace and technological progression.
With the recognition of the above facts, also comes the
recognition of the Symbiotic relationship that has been developed
across the years, between online commercialization and Digital
currencies, with the latter gaining startling relevance in the
instances of online commercial transactions across the world
today.
The evolution of Digital currencies in online transactions, is
one that has happened quite naturally, this has been attributed to
the effortless advantage, sustained when Digital currencies, is
employed as legal tenders in online commercial transactions.
Among the numerous reasons canvassed for the huge embrace of
Digital currencies as legal tenders for online commercial
transactions, is the enviable instances of its speed, security,
privacy, transparency and affordability of the charges associated
with it.
Another prevailing advantage that has recently sustained the
Digital currency narrative as a chief accomplice in successful
online commercialization in the 21st century, has been
the recent role played by Digital currencies, to facilitate the
ease of doing business during the Corona-Virus era, a lot has been
witnessed of how Digital currencies, persisted in sustaining online
business transaction, while financial institutions where locked
down, liquidated and unable to continue business due to the
pandemic. This has doubtlessly added to the credence of virtual
currencies, above other currencies in the occasion of online
transactions today.
LEGAL RECOGNITION OF DIGITAL CURRENCY IN NIGERIA, WHERE
DO WE STAND?
Amidst the wide acclamations in the recognition of Digital
currencies among the league of currencies known to business
transactions, several legal climes across the world, have made
considerable efforts to provide legal frameworks for the smooth
recognitions of Virtual currencies, for diverse purposes. Some
legal systems, have recognized digital currencies for the purposes
of taxation, while others have done considerable much to recognize
digital currencies as a medium for business transactions, and the
remaining climes have maintained reluctance in their legal
recognition of digital currencies, or outrightly forbidden virtual
currencies. Just like their African counterparts, Nigeria has
joined the league of countries who have tacitly rejected the idea
of digital currencies, in commercial transactions.
The stance of Nigeria, was given credence, when the Central Bank
of Nigeria, issued a Circular to
Banks and other Financial institutions on Virtual currency
operations in Nigeria. In the above circular, the CBN, decried
gross disadvantages that accompanies the use of digital currencies,
where it noted:
Transactions in
Virtual Currencies
are
largely untraceable and
anonymous
us
making them susceptible to abuse by criminals, especially in money
laundering and financing of terrorism. Virtual currencies are
traded in exchange platforms that are unregulated, all over the
world. Consumers may therefore lose their money without any legal
redress in the event these exchangers collapse or close
business.
Further to the above, the Nigerian Deposit Insurance Corporation
(NDIC) further warned, that Nigerians will not be afforded consumer
protection and insurance from its institution, when trading on
crypto currencies as virtual currencies where it noted that, “no
central bank will accept digital currency as a substitute for its
national currency or part of its monetary system, when it is not
able to control it”
While the above is true, it is respectfully noted, that law
exists as a dynamic machinery of social engineering necessary, to
govern and address new trends, changes and curves in human
interactions with one another. With particular respect to the Cyber
Crimes Acts legal means could be exploited under this enactment, to
cure the above mischief and make the Nigerian commercial landscape
a better and favorable place for investors. Moreover, it is
dangerous to leave an area of human interaction, without a legal
civilization and regulation, as this will give perceived criminals
a fun filled day in manipulating such areas in their favor, just as
it is kindly noted, Nature abhors Vacuum. Furthermore, it
is noted, that where there is no law defining a wrong or an
offence, there can be no commission of such wrong or offence, and
no corresponding punishment or remedy from the courts to curb that
mischief and further develop such emerging curve.
Recently however, the Security and Exchange Commission, sequel
to its powers under Section 13 of the of the Investment and
securities Act (2007) as the primary regulators of Nigeria’s
Capital market and investment frameworks, and consequent to such,
on the 14th of September 2020, issued a notice
recognizing virtual crypto assets, virtual tokens, blockchain based
offers of digital assets and other digital currencies within the
confines of “Securities”, unless the contrary is proven.
While the above development, is a laudable development and a
plausible shift from the previous position of the Central Bank of
Nigeria, it shows Nigeria’s readiness to position itself in the
league of digital economies in the world. However, moving forward,
more must be done in developing and widening the curve in the legal
recognition of Digital currencies in Nigeria, as a legal tender and
a means of transfer of value for commercial transactions in
Nigerian commercial market, beyond the restrictive approach of
recognizing them as Securities, for the following reasons:
- Lower commercial charges and fees,
- Quicker movement and flow of funds,
- There is little or no inflation,
- Secured modes of exchange and transfer of funds,
- Global commercial reach and trade network,
- Transparency and confidentiality among commercial players.
CANADIAN LEGAL RECOGNITION OF DIGITAL CURRENCY,
MODELLING THE ADOPTION OF A LEGAL ENVIRONMENT FOR DIGITAL
CURRENCIES, TO THRIVE IN NGERIAN COMMERCIAL MARKETS.
While it has been carefully noted above, that Nigeria has in
recent days, done laudably to reposition itself favorably to
harness the treasures accessible for her economy through digital
financing and currency, it is important to take a cue from
developed economies, who have leveraged on the medium of digital
currencies, to grow their economy. Below, we will quickly look at
the Canadian legal system, as a model for Nigeria’s adoption of
crypto currency in commercial transactions.
The Canadian government, recognizes and allows the use of crypto
currencies and other digital currencies, as a means of buying goods
and services in Canada. Furthermore, the purchase and sale of
digital currencies on open exchanges, called digital currencies
exchanges or crypto currencies exchanges are allowed. However,
digital currencies are not recognized as the official currencies of
Canada, under the Canadian Currency act.
Digital currencies are also subject to taxations in Canada, as
they are considered as a commodity used for money service business,
and barter transactions. They are also subject to income taxes
under the Income Tax Act, where they are used for the purchase of
goods and services.
Interestingly, mining of cryptocurrencies can be undertaken for
profit or otherwise in Canada, and such are subject to taxes under
Section 10 of the Income Tax Act. In determining the payable tax,
consideration is placed on the inventory per year.
They have been notable for the adoption of the world’s first
national law on digital currencies and for pioneering the treatment
of digital financial transactions under the ambit of their
antimoney laundry laws.
CONCLUSION.
It is kindly noted, that with the harsh realities, which the
Corona Virus pandemic has left behind for the Nigerian economy, as
other economies across the nations of the earth, the prevalent
certainties of economic recession and down turns, has left many
physical currencies without adequate values and purchasing powers
in the global market, during commercial transactions and the
Nigerian currency, has not been left untouched by this reality. It
is thus within reason, to consider the adoption of a legal
environment that recognizes and governs the free, fair and
equitable flow of digital currencies which have been known to have
exhibited resilience, in the midst of the corona economy, within
and without our commercial markets.
It is further noted, that with the recent ratification of the
African Continental Free Trade Agreement, and by effect the
unification of African market economies, digital currencies
provides a unified medium for the sale and purchase of commercial
commodities across African boarders and further affords a secured
free flow of financial resources across several nationalities in
Africa, thereby aiding Nigeria’s participation in the African cross
boarder market economy and ultimately, enriching our economy.
[1] Transactional Attorney,
Tech Lawyer, and Associate at O.M Atoyebi S.A.N &
Partners, E-mail Address:
adeyanjuizeek@gmail.com