After years of uncertainty, Nigeria is moving toward balanced crypto regulation.
The Central Bank of Nigeria (CBN) has confirmed it is working with the Securities and Exchange Commission (SEC) to create a more structured framework for digital currencies.
Governor Olayemi Cardoso made the announcement during his annual lecture at Lagos Business School on October 3. Cardoso highlighted the potential of fintech, blockchain and cryptocurrencies, while warning their long-term impact on policy and the financial system remains uncertain.
“The goal is to align all regulatory authorities so that digital currency development is both innovative and sustainable,” he said.
Although details of the collaboration are still emerging, the effort is expected to address past regulatory overlaps and tensions between the CBN and SEC.
Under the new approach, the SEC is likely to take the lead on licensing and supervising Virtual Asset Service Providers (VASPs), while the CBN will focus on monetary policy and overall financial stability.
The framework will also likely introduce stronger identity verification, anti-fraud measures and disclosure requirements for crypto platforms.
According to The Crypto Times, the SEC is also developing rules to tax eligible crypto transactions, a move which could integrate digital assets more fully into Nigeria’s formal financial system.
Crypto integration has not been easy
Crypto first gained traction between 2016 and 2020 as Nigerians turned to Bitcoin and other digital assets to bypass foreign exchange limits and inflation. By 2020, the country ranked among the top three globally for transaction volumes.
This growth came to a halt in early 2021 when the CBN ordered banks to close accounts linked to crypto trading due to fraud and money-laundering risks. The move pushed activity underground, with peer-to-peer platforms filling the gap.
Two years later, the stance softened. In December 2023, the CBN lifted the ban and introduced new rules allowing banks to work with licensed VASPs. The reversal paved the way for a more structured approach to digital assets.
Reflecting on the shift, Cardoso said regulators were caught off guard by the speed of adoption.
“As foreign exchange became difficult to get, many people turned to crypto and a whole architecture started to evolve,” he said. “In many respects, regulators left it alone until it became clearer there was a need to understand that market better.”
