New Regulatory Framework for Digital Assets in Nigeria

President Bola Tinubu has signed an executive order establishing a comprehensive regulatory framework for virtual assets, including cryptocurrencies and stablecoins. The move signals a significant shift from previous policies that sought to limit crypto adoption.

The new Virtual Asset Council will be chaired by the Central Bank of Nigeria (CBN) and include representatives from key agencies such as the Nigeria Revenue Service (NRS), Securities Exchange Commission (SEC), Nigerian Financial Intelligence Unit (NFIU), and the Office of the National Security Advisor (ONSA).

The council’s mandate includes:

  • Developing harmonized regulations that align with national security, economic, and social objectives
  • Protecting citizens from fraud and safeguarding financial integrity
  • Creating a regulatory sandbox for testing virtual asset products under supervision
  • Establishing clear guidelines for stablecoins and cross-border transactions

Implications for Stablecoin Sector

Technology attorney Rotimi Ogunyemi notes that the new framework could particularly impact Nigeria’s growing stablecoin market. He emphasized the need for regulations requiring credible reserves, separation of customer assets, reliable redemption mechanisms, and clear consumer protections.

Contextual Background

Nigeria has previously taken a cautious approach to cryptocurrencies, with authorities in 2021 banning financial institutions from processing crypto transactions. However, digital asset adoption has continued to rise, particularly as a hedge against currency devaluation and limited access to foreign exchange.

According to Thunes, approximately 40% of Nigerians now use cryptocurrency for international money transfers—significantly higher than the global average of 11%. This widespread usage reflects both macroeconomic challenges and growing digital financial inclusion.

The government’s shift towards regulation suggests a recognition of crypto’s role in the economy and a desire to harness its potential while mitigating risks.