 The Security and Exchange Commission SEC released its long-awaited digital asset regulation that is meant to guide how digital assets such as cryptocurrencies are regulated in a country. Now, the Neuros for digital assets are part of its effort to regulate the digital virtual assets such as Bitcoins and NFTs. This document titled Neuros on issuance, offering platforms and custody of digital assets cover regulation on five major items ranging from issuance of digital assets to rules that govern digital asset exchanges in the country. Expectedly, the regulations have drawn several positive and negative remarks from cryptocurrency enthusiasts across the country and outside Nigeria. We will be looking at these regulations on the show today. Welcome to Business Insight and Class TV Africa. I am Justin Akadone. Now, just before we get into the discussion of the day, here is a highlight of the major stories that made headlines in business Nigeria this week. Take a look. Federal governments have said it is targeting local refining of over 2.555 billion barrels of crude oil worth over 120 trillion naira in the next five years. A combined refining capacity of more than 1.4 million barrels per day is expected from the rehabilitation of the existing four national refineries, co-location of new refineries, construction of Greenfield refineries, and construction of modular refineries as part of the Ministry of Petroleum Resources refining roadmap in the next five years. The refining of 1.4 million barrels per day is approximately 2.555 billion barrels in five years. At least 51.3 million unique telecommunication devices may not have national identification numbers. According to the Nigeria Communications Commission's document, titled Deployment of a Device Management System, Project Information Memorandum, Nigeria had about 132 million unique devices connected to telecommunication networks in 2020. It said, with more than 200 million active lines on the Nigerian telecommunication network, there is great potential for the development of a DMS in the Nigerian market. The Nigeria Identity Management Commission Enrollment Dashboard for April 2022 showed 80.7 million people at NINTS as of April 23, 2022. This leaves 51.3 million device owners without NINTS. Experts and entrepreneurs in the digital space have called for a critical review of Nigeria's digital economic regulations to meet up with other progressive economies. The professionals who spoke at the 2022 Legal Business Conference in Lagos said these digital sectors included blockchain, crypto and fintech innovation. According to a statement, the professionals in the fintech and blockchain sub-sector of the financial industry said Nigeria was losing billions of naira or into its inability to explore and maximize my rates of opportunities and naira in the digital world like other economies. African Economic Outlook 2022, released by the African Development Bank, has projected the average growth of Nigeria's economy this year through to 2023 at 3.2%. The report, which was released at the ongoing annual general meeting of the bank in Akwagana, focuses on the growth prospects of the continent in the context of the COVID-19 pandemic, climate change adaptation, energy transition and other structural challenges. The report unveiled by the president of the bank, Dr. Akewumi Adishina. His team and board of governors examine the economic outlook at regional level and country by country basis. AFDB's projection is slightly higher than the 3.11% growth rate of quarter one as released by the National Bureau of Statistics. Welcome back. Those are the stories that made headlines. Reactions are already trailing the new regulations by sec. Some experts have said although the guidelines were a welcome development for the country, the ingredients of the regulation did not favor the local market. Joining us now to share his perspective on the development is certified blockchain architect, Rume Dominic. Rume, thanks for joining us on Business Insight and Plus TV Africa. Thank you very much. I'm very grateful. All right. Let's dive into it, Rume. Let's just start by asking your reactions concerning these new sets of regulation. How does it really hit you? Okay. Interestingly, it's one that is actually a welcome idea. It is a very good thing actually. It is good that we have clarity, especially with digital assets in Nigeria. When investors want clarity, when they want to get into any market, when they want to invest a lot of money, a lot of billions into every market, and they want to steep profit, they want to be able to weigh their risk to reward them in order to ensure that they are extremely profitable on the long run. So, while we see some of these particular complaints around the recent S&P regulation that was released, I find it as very interesting. It's one that will actually pave a good way of the development of cryptocurrency assets. Because, I mean, we have seen good players come in from outside this particular country that would also have a lot of money to be able to invest. But one place that I find it very, very troubling is that the SEC, in most of their provisions, especially for this particular regulation, they are actually on the side of taking from most of the cryptocurrency pioneers, and they are not really giving back to them. Alright. We'll talk more about that. They take in from the players and not really investing, or take it one step at a time. But let's talk about some other issues people have commented on specifically. The Securities and Exchange Commission is actually classifying this particular asset as securities, as it were. And it's a pair-to-pair network, if you ask me, and it's very hard to regulate. Don't you think that in itself is an issue? That is actually not meant to be our first major focus. Our first major focus should be this particular technology that just hits the ground. When we look at it in terms of finance, it is just an enabler of finance in the sense that it is currency that is used in the digital world to actually enable finance. So we should first be focused on not the pair-to-pair nature, or how safe it can be because of this particular regulation that came on. But let's take, for example, some of the major requirements stated that we needed about 100,000 Naira first of all for an application fee. They needed about 200,000 Naira to be able to get the processing going on. Then you also needed about 30 million Naira to also get some registration. And then you also needed about 500 million Naira forward for capital, which you would need to put on ground before you are able to even exchange digital asset, just like you said now, especially Bitcoin, it's called a pair-to-pair. So after you've brought forward all these requirements, you still need to now go, haven't fulfilled this particular legal requirement before you be able to exchange Bitcoin. If you put it in the pair-to-pair manner, everybody that has fulfilled this, but can you hear me? Yo, Kenhei, you were lost here at some point. Please go ahead with your thoughts. Okay. So I was saying that we should look critically at the security aspect of it in the sense that we looked at it and then we needed about, from the requirements that we're giving, we needed about 100,000 Naira for you to first of all register. You needed about 300,000 Naira for you to even put forward that particular application. You needed about 30 million, which is about almost $50,000, to be able to quickly get that particular registration process going on. And then you need a capital requirement of about 500 million Naira. And then you also need an upfront capital of about $8,600. When you put all of these together, it ensures that if somebody goes into this particular space and does not fulfill what he or she is promising to the Nigerian investors, to the Nigerian populace, all of these particular assets that we have made mention of in the past would be at risk. So it makes people to be able to live up to a certain level of integrity, especially with the deliverables that the Nigerian populace would be expecting, the trustworthiness that the Nigerian populace would be expecting from the investment that they are making into this particular digital space. So we should focus on the anonymous nature of it first, we should focus on the security that it is providing to the Nigerian populace through this particular revolution. That is what I think. Alright, Ruma, fine. You've talked about the cumbersomeness of the financial outlay and requirements for digital assets and offering platforms, as the DAOPs. But some people have also said that it's as though the security and exchange commission and the CBN are actually walking at cross-purposes over this regulation. Do you agree? Well, I would not say that that conclusion is far-fetched. Regardless, let's also note that this is not a letter or a circular from the CBN that negates their February 2021 circular to the banks that ban cryptocurrency. This is actually a circular from the SEC saying that, well, you want to do cryptocurrency in Nigeria, you want to be able to get into this space, you want to do big business here. You guys can, if you got this particular requirement, then you are free to be able to come into our legal system and you are legally recognized. Meanwhile, I think what will happen is after this particular phase has passed, then the CBN would now come out and start lifting some of those bands that they've placed on cryptocurrency before now. But that is not really to say that because of this particular circular for the regulation that is out, CBN has actually withdrawn that particular statement or that particular circular that was given out to the banks. It is just a way to be able to now say, okay, people that are interested, since Nigeria is one of the biggest markets, while welcoming that particular engagement, like, you know that Nigeria was part of the people that went for this last Salvador's Bitcoin conference. And considering the fact that Nigeria also has the CBDC, which is the ECOR in there, attached to their portfolio, it is good that Nigeria is actually taking a very strong standpoint to regulate this. And I think the CBN should start taking a bit of lessing from this now. But what I want them to do is to do something that is also stretching to the community. Before they take many of these particular conclusions, they should try to reach a lot of the communities so that they would be able to play this particular regulation in a way that it will not stifle innovation, it will be beneficial to both the small players and the big players. I was going to ask you that. Because a lot of people actually said before this, or after this new set of rules were brought out by the Securities and Exchange Commission, it was a general thing that, you know, the active players or the key players were not carried along, there was no town hall meeting or stakeholders meeting to bring about all of the impetus. As though they just brought them the hammer on players. Do you agree? Yes, I actually do agree. Because when you take a statistical outlook at the industry right now, you see that the majority of the players, especially in the Nigerian market, they are young people, young people within the age of about 20 to 30 years old. Unless you factor out, one of the major problems of entrepreneurs in Nigeria is access to capital. And that's one of the problems that blockchain actually solves because it helps them to be able to raise funds through processes like crowdfunding. But then, access to capital, when you might not have lasted in the space for so long a time, maybe like four, five years, you might not have access to those much capital that we just called. So you see that the average 25 years old boy, which is already a medium player in this particular space, might not really be able to fill all of those requirements. Now, it is like this. You then shut that particular man's business down because of this particular SEC regulation. And then you have foreign investors that have seen the opportunity. They come into the country and they have the money because they are actually coming with enough dollars and then they are able to pay the Security Exchange Commission and they are able to monopolize this particular market. Meanwhile, there is also no provision in all of this regulation saying that, okay, since some of these local players, all these young individuals might not be able to meet up, these young individuals, when these big companies come with their money now, would they partner with some of these local companies? Would they be able to say, okay, let them invest 20% of the funds back into development of these local companies so that with time, after like two years, these particular local players that do not have money now, they will start investing into the big leagues and start playing the big leagues. Or I think they should have also done it like this. They should have also looked at a way of saying, for some of the high, maybe if you do so-and-so value of transaction because they focus so much on the exchanges, if you do so-and-so volume of transaction, then you can pay so-and-so amount, maybe about 15 million or about 10 million. Then if you are playing in so-and-so capacity, they make it like a tier, they give it a tier type of structure so that a lot of people, it can be accommodating for a lot of young players so that you will not see the situation die and a lot of you just go home at a time where there is a lot of recession to come out from. Okay, so speaking of which, all of these challenges that you've talked and big companies trying to take over, when, ordinarily, it is the young people who are really involved in this digital economy in Nigeria. So don't you think it's high time that these players, be they active or just impassive ones, don't you think it's high time that you guys came together and maybe forged some sort of a common front or maybe like an identity so that your voices can be heard and play? Yes, I strongly agree with you that it's high time we come together to form a very strong group and movement that will make our voice heard very well. And coming to that particular aspect, that's where we have one of the strongest bodies in the U.S. CIPA Stakeholders of the Blockchain Association of Nigeria, which I am an executive of. And if you notice about two weeks ago, we posted, we published a circular on one of the national dailies, especially relating to the digital asset and some of the challenges around it. So we have started guiding up ourselves, guiding up our might to see that we get one single voice as an organization as CIPA. So we do that with the platform of CIPA, which is the Stakeholders of the Blockchain Association of Nigeria. So that we can fold petitions and we are also able to work with regulators. The major problem I see here is actually the willingness of the government bodies to work with people that are far much more experienced than them. You see, in other developed countries, they set up panels, they set up board rooms for experts to know about all of these things. They even pay for them to come and teach them these things and then guide them through. While doing this, a lot of us are trying to do these things in Nigeria, especially at the governmental level with trial and error. They are just trying to copy things that are not realistic or that is not even related, is not practically applicable to their geographical region. So I think that is where the major problem is coming from. They should try to see how they can work with much more experts and then see how they can also tailor their regulations, especially relating to their geographical location, their market, and how Nigeria can actually really scale with this particular innovation. Well, Rumen, it's good you've talked about some of these challenges and I just want us to look at some preferable solutions to all of this. You talked about the exchange focusing on it as more of a security than all the other issues. You also talked about identifying the original players and working with them as much as they might not really understand them how it relates to this particular geographical location. So what else can maybe regulators and of course players do in their immediacy in the short term to ensure that all of these bottlenecks are stemmed? They say you can never beat the place of experience in a man's life. One of the ways a lot of us started getting very interested in this that we started experiencing the currency, we started experiencing the technology itself and we started developing use case and business solutions that are currently still viable and have a lot of solutions that are still offering to the public. So the first place people should come from is to start from a knowledge point which is the place of acquiring skills. That's why at VORM we have all of the blockchain skills that we have. We have about 20 blockchain courses where we expense all of those things by 107 different models which focuses on the security, the regulatory parts of cryptocurrency, the distributed ledger, the business use case, how it applies to different technologies, different geographical locations, the new metaverse, the NFTs, how to be able to use them to assess decentralized autonomous organizations, how to be able to use them for governance and voting. So this is actually one of the parts way that is required for a better regulatory and implementation process. When we have that and we are coming from a knowledge point and we are able to tackle this with enough experience, then that particular challenge will no longer be an issue. Alright we must say a very big thank you to you Rume Dominic for all of this advice that you have shared. We look forward to seeing you again in future as there is development on food in our digital economy. Thank you so much Rume. Alright no problem. Thank you. Yes it is indeed a pleasure. Rume Dominic is a certified blockchain architect. Staying with the financial sector, the Chartered Institute of Bankers of Nigeria CIBN says it will continue playing its role as a bridge to engender positive collaborations between all players in FinTech for the good of the industry. Ken Akbar has said this during his investiture at the 22nd President and Chairman in Council of the CIBN which held in Lagos. I will leave you with the details of that and I will see you again next time. I am Justin Akadounye. Many thanks for watching. I will say that. Gavard at this whole are banking professionals who have converged to celebrate the men who are in the hems of affairs of the Bankers Institute for the next two years. Though they are in a celebratory mode musings about the industry which has witnessed relative stability in recent times are made economic headwinds resound. After his investiture the new CIBN bus Ken Akbar says the future of banking which revolves around Generation Z is a full strategic goal for his administration hence the need to encourage FinTech. His predecessor by Oluqbaimi shares similar thoughts. The future is here. It means that we need to begin to build up inclusion. Have the Gen Z the younger people who definitely will take over from us to be inspired to the business of banking. There are a lot of channels of delivering our services and technology is the main thing now. If you don't embrace technology in banking you fail. So that's why I encourage Bank. We do a lot of FinTech but we should do much more than what we are doing now. The competition for traditional banks has shifted in the past seven years to small but mighty adventure seeking entities called FinTechs. As a conversation shifts towards payment system and the CBN's eNira the bank executives share their thoughts on the future and viability. Meanwhile in an address the Lagos State Government promises to continue to make the state conducive for business to thrive. In terms of payment system you discover that the banks have done so much in accelerating the payment system. It's one of the countries in this world where you can do online service and get instant payment. It does even in US if you do payment it doesn't happen instantly and that essentially is a credit to the banking system. I think in Nigeria in particular we prefer cash and cash but little by little I think the tennis or the policy of eNira we go down. In line with re-engineering the sector, the CBN promises to develop a digital roadmap for the banking and finance industry and offers certifications on digital skills.