Nigeria is making changes to its regulations regarding digital assets, with the Nigerian Securities and Exchange Commission (SEC) announcing updates to ensure a more comprehensive and adaptable framework for the digital asset market. One key initiative is the Accelerated Regulatory Incubation Programme (ARIP), designed specifically for Virtual Asset Service Providers (VASPs) to help them meet the new regulatory standards.
The SEC has established a dedicated onboarding window for VASPs to participate in the ARIP, emphasizing that enforcement actions will be taken against non-compliant VASPs. This regulatory update is part of Nigeria’s efforts to strengthen oversight of its growing cryptocurrency market, particularly with the appointment of a new SEC Director-General, Emomotimi Agama.
In addition to the SEC’s changes, the Central Bank of Nigeria (CBN) has issued guidelines for banking relationships and account operations for VASPs in the country, highlighting Nigeria’s commitment to responsible regulation rather than outright bans on virtual assets.
Nigeria’s approach to cryptocurrencies has evolved over the years, moving from a ban on banks facilitating crypto transactions to a focus on taxation. Despite initial concerns about money laundering and terrorism financing, the government has shifted towards regulating and taxing cryptocurrencies instead.
The timeline of Nigeria’s cryptocurrency journey includes actions such as the CBN’s circular directing banks to close accounts associated with crypto transactions, investigations into financial institutions serving crypto traders, and discussions between regulatory bodies like the CBN and the SEC on the impacts of cryptocurrencies. The IMF’s support for regulating cryptocurrencies and the SEC’s recognition of digital assets as securities further demonstrate Nigeria’s evolving stance on the matter.
With the introduction of the eNaira as Nigeria’s central bank digital currency (CBDC) and the imposition of taxes on digital assets through the finance bill, Nigeria is embracing cryptocurrency adoption while ensuring regulatory compliance and financial security. Despite regulatory challenges, Nigeria remains a standout in cryptocurrency adoption, with significant growth in crypto transactions over the years.