Nigerian analysts challenge the perception that the cryptocurrency peer-to-peer (P2P) market is responsible for the shutdown of the Bureau de Change (BDC) in Abuja. The reports highlight the unavailability of United States dollars as the primary reason for the BDCs' closure, with allegations implicating the existence of P2P crypto exchanges. However, experts argue that cryptocurrency plays a minimal role in Nigeria's forex activities and emphasize other significant factors contributing to forex shortages, such as price fluctuations and the country's reliance on imports.


The Nigerian P2P market emerged after the Central Bank of Nigeria's 2021 ban on institutions from buying and selling crypto. Although a circular in December 2023 lifted the ban on Nigerian banks facilitating cryptocurrency transactions, many Nigerians still face challenges conducting foreign exchange transactions through traditional banking due to higher fees. As a result, P2P transfers have become more attractive due to lower fees, promoting greater transaction inclusion, and providing a hedge against inflation for the Nigerian naira.


Furthermore, the analysts underscore the potential for collaboration between traditional players like BDCs and digital currency operators, contingent on the government's regulation of both sectors. They emphasize the need for appropriate regulation of the cryptocurrency market and urge the government to understand the operations of the crypto industry to effectively enforce regulations.


In a separate development, the European Union has advanced its regulatory framework for artificial intelligence (AI), with member states endorsing the EU's AI Act. This historical move marks a significant step in regulating AI applications, including governmental use of AI in biometric surveillance, regulation of AI systems like ChatGPT, and transparency rules before market entry.


The approval of the AI Act highlights a risk-based strategy for regulating AI applications, with a focus on high-risk cases where developers face greater liabilities. This development comes amid concerns about deepfakes, prompting efforts to tackle the potential manipulation of public discourse through fabricated videos created by AI algorithms.


The AI Act is set to proceed toward legislation with a vote by a crucial EU lawmaker committee, followed by a European Parliament vote. The European Commission also intends to establish an AI office to monitor compliance with high-impact foundational models and support local AI developers.


Overall, the news from both Nigeria and the European Union underscores the evolving regulatory landscape in the realms of cryptocurrency and artificial intelligence, highlighting the need for effective and forward-looking regulatory frameworks to support innovation while mitigating potential risks.


(AMAKA NWAOKOCHA, COINTELEGRAPH, 2024)