Nigeria has formally recognized cryptocurrency and other virtual assets as securities for the first time.
President Bola Tinubu’s recent enactment of the Investment and Securities Act (ISA) 2025 ushers in a new era of regulatory clarity for the country’s digital asset ecosystem, which has been clouded in uncertainty for more than a decade.
The new law not only acknowledges virtual assets and investment contracts as securities but also places Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the regulatory oversight of the Securities and Exchange Commission (SEC).
Section C on page 188 of the official clean copy of the ISA bill, seen by Nairametrics, recognizes virtual and digital assets as securities.
It describes securities exchange or registered exchange as an organised facility that maintains and provides an infrastructure :
- (a) for bringing together buyers and sellers of securities, virtual assets, commodities, or financial products or instruments;
- (b) for matching bids and offers for securities, virtual assets, commodities, or financial products or instruments of multiple buyers and sellers; and
- (c) whereby a matched bid and offer for securities, virtual assets, commodities, or financial products or instruments constitutes a transaction.
This development is expected to strengthen investor protection, enhance accountability, and curb abuse in the rapidly growing crypto sector.
According to the Chainalysis 2024 Geography of Crypto Report, Nigeria ranks second globally in cryptocurrency adoption, behind only India.
Sub-Saharan Africa received an estimated $125 billion in on-chain value between July 2023 and June 2024, with smaller denomination transactions dominating Nigeria’s crypto activity.
Stablecoins also play a significant role, contributing 43% of the region’s total transaction volume.
A New Framework for Crypto Regulation and Economic Reform
The ISA 2025 introduces structural reforms aimed at aligning Nigeria’s capital markets with international best practices.
- By providing a clearer legal framework for emerging asset classes like digital assets and commodities, the Act paves the way for deeper capital formation and economic diversification.
- Speaking on the legislation, SEC Director-General, Dr. Emomotimi Agama, lauded the President’s decision, describing it as a boost for investor confidence and the broader capital market.
“The ISA 2025 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently, and reposition Nigeria as a competitive destination for local and foreign investments.”
While this regulatory clarity is celebrated as a transformative move, challenges remain.
- Founder and CEO of Bchain Africa, Femi Adegolu, expressed optimism about the industry’s growth but emphasized the need for a more detailed government strategy.
“I would say that the growth of the industry will evolve gradually from policymakers to service providers, because currently, there are provisional licenses that have been given to some companies in Nigeria to operate crypto, and there are some that have not been given,” he told Nairametrics in an interview.
However, Adegolu cautioned that “there’s not a full clear roadmap on what needs to be achieved in the next couple of years, months, or weeks.”
- Chucks, a Lagos-based banker, celebrated the newfound legitimacy of crypto trading.
“We know that Nigerian policymakers are always slow when it comes to things like this, but it’s better late than never. I can now confidently trade on different crypto exchanges without fear, and I can also train intending crypto traders,” Chucks told Nairametrics.
Nigeria’s Journey to Crypto Adoption: Past, Present, and Future
The recognition of cryptocurrency as securities marks a significant departure from the past administration’s restrictive stance on digital currencies.
- Under previous policies, crypto traders were forced to rely on underground operations and peer-to-peer (P2P) exchanges to continue their activities as regulatory uncertainty loomed.
- International platforms like Binance adapted quickly, offering P2P services tailored for the Nigerian market.
- The tide began to turn in mid-2023, when the current administration eased its stance, signaling a shift toward a more progressive regulatory approach.
As part of its Accelerated Regulatory Incubation Program (ARIP), the SEC granted provisional licenses, or “Approval-in-Principle,” to two cryptocurrency exchanges—Quidax and Busha in 2024.
SEC said in August that the ARIP initiative has since expanded to include two digital asset exchanges, four digital asset offering platforms, and one digital asset custodian. Five other firms, including Trovotech Ltd and Wrapped CBDC Ltd, are also testing their models under the SEC’s Regulatory Incubation Program (RI).
What you should know
The ISA 2025 positions Nigeria as a leader in the global cryptocurrency landscape, with the SEC aiming to retain its “Signatory A” status under the International Organization of Securities Commissions’ (IOSCO) Enhanced Multilateral Memorandum of Understanding (EMMoU).
- This benchmark is critical for ensuring credibility in global financial markets.
- By adopting a progressive stance on cryptocurrencies, Nigeria is poised to attract both local and international investors, driving innovation and economic growth.
As policymakers and industry leaders work to refine this framework, the ISA 2025 could set the stage for a vibrant digital economy in Nigeria.
