Nigeria

Disclaimer: This overview is provided for informational purposes only and does not constitute legal or financial advice. Cryptocurrency regulations change frequently. Always consult qualified legal and financial professionals and verify information with official regulatory bodies before making decisions based on this content.

Legal Classification & Regulatory Framework

Cryptocurrency Status

Cryptocurrencies are legal and regulated in Nigeria. The country’s approach has evolved significantly: after the Central Bank of Nigeria (CBN) prohibited banks from servicing crypto businesses in February 2021, forcing trading into peer-to-peer channels, the ban was reversed in December 2023 when the CBN issued Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers. The regulatory landscape was further solidified with the Investments and Securities Act (ISA) 2025, signed into law on March 31, 2025, which formally classifies virtual assets, including cryptocurrencies, tokens, and blockchain-based instruments, as securities under Section 357.

The Securities and Exchange Commission (SEC) applies a substance-over-form approach, classifying digital assets by their economic function as securities tokens, utility tokens, or payment tokens. Cases with uncertain classification require a no-objection application to the SEC. Cryptocurrencies are not recognized as legal tender, and banks may not hold or deal in crypto directly, but licensed virtual asset service providers (VASPs) can access the banking system for fiat operations.

Tax Treatment

Nigeria’s crypto tax framework underwent a major overhaul with four Tax Reform Acts signed by President Tinubu on June 26, 2025, effective January 1, 2026. The Nigeria Tax Act (NTA) 2025 replaced the earlier flat 10% capital gains tax introduced by the Finance Act 2023. Gains from digital asset activities, including trading, transfers, mining, staking, and airdrops, are now taxed under the standard income tax regime: progressive individual rates from 7% (income below N300,000) up to 25% (above N3.2 million), with individuals earning below N800,000 annually exempt. Companies pay the standard 30% Companies Income Tax rate.

The Nigerian Tax Administration Act (NTAA) 2025 introduced strict enforcement measures: all VASP user accounts must be linked to Tax Identification Numbers (TIN) and National Identification Numbers (NIN), and VASPs must submit monthly activity reports to the tax authority detailing user transactions, asset types, and naira values. Non-compliance carries penalties of N10 million for the first month and N1 million per subsequent month, with potential SEC license suspension. A 7.5% VAT applies to fees and commissions charged by crypto platforms, though not to the underlying crypto-assets themselves.

Regulatory Oversight

The SEC serves as the primary regulator for VASPs, digital asset exchanges, custodians, and token issuers, with authority now codified in the ISA 2025. The CBN oversees monetary policy, financial stability, and bank-VASP relationships through its December 2023 guidelines. The Nigerian Financial Intelligence Unit (NFIU) receives suspicious transaction and currency transaction reports from VASPs. The Economic and Financial Crimes Commission (EFCC) handles criminal enforcement of crypto-related financial crimes, while the Special Control Unit Against Money Laundering (SCUML) supervises designated non-financial businesses. The Federal Inland Revenue Service (FIRS), being restructured as the Nigeria Revenue Service under the 2025 reforms, handles tax enforcement.

Business Environment

Banking Relationships

The December 2023 CBN guidelines restored bank access for SEC-licensed VASPs after a nearly three-year ban. Banks may now open and operate accounts for licensed crypto businesses, enabling fiat deposits and withdrawals. However, banks may not hold or deal in cryptocurrency directly. To obtain banking services, VASPs must hold a valid SEC license or provisional registration, meet minimum capital requirements, link all customer accounts to Bank Verification Numbers (BVN), and maintain robust AML/CFT compliance protocols. Banks must also conduct their own due diligence on VASP applicants.

In practice, a disconnect remains between regulatory permission and bank-level risk appetite. Reports indicate that some individual bank customers still experience account monitoring or restrictions for crypto activity. The EFCC has also intervened, securing court orders in 2024 to freeze accounts at fintech companies linked to unauthorized forex trading and crypto money laundering. Despite these challenges, established exchanges that have obtained SEC licenses maintain functioning banking relationships.

Licensing Requirements

The SEC administers the Accelerated Regulatory Incubation Programme (ARIP), launched in June 2024, as the pathway to VASP licensing. The process begins with an Initial Assessment Filing, followed by SEC review and a formal ARIP Application submitted through an accredited solicitor. Successful applicants receive an Approval-in-Principle (AIP) valid for up to 12 months, during which they must demonstrate compliance before obtaining full registration. Licensed VASPs are subject to quarterly reporting on user growth, transaction volumes, and compliance metrics.

Applicants must be Nigerian companies incorporated under CAMA 2020, with the CEO or managing director resident in Nigeria. Exchanges face a minimum paid-up capital requirement of N500 million and must post fidelity bonds of at least 25% of paid-up capital. The SEC granted its first provisional licenses to Quidax and Busha in August 2024. Additional exchanges are in the ARIP pipeline, and the SEC indicated it would accelerate further provisional licenses in 2025.

Innovation Support

Nigeria launched the eNaira in October 2021 as Africa’s first central bank digital currency, built on Hyperledger Fabric. However, adoption has been very low, with the eNaira representing only about 0.36% of currency in circulation as of early 2024 and an estimated 98.5% of registered wallets inactive. The CBN partnered with Gluwa in March 2024 to boost adoption and indicated it would reevaluate the CBDC in 2025.

In parallel, the Africa Stablecoin Consortium received CBN regulatory sandbox approval in January 2024 to pilot the cNGN, a naira-pegged stablecoin built on multiple public blockchains including Ethereum, Polygon, and Tron. The National Information Technology Development Agency (NITDA) approved a National Blockchain Policy in May 2023 aimed at integrating blockchain into public administration and economic sectors, and has proposed an indigenous blockchain platform called Nigerium for national data sovereignty. The Nigeria Inter-Bank Settlement System partnered with Zone’s Blockchain Network in August 2024 for blockchain-based payment processing.

Market Characteristics

Adoption Patterns

Nigeria is one of the world’s leading cryptocurrency markets by adoption. The Chainalysis 2024 Global Crypto Adoption Index ranked Nigeria second globally (behind India), and the 2025 index placed it sixth globally while maintaining its position as the top crypto market in Sub-Saharan Africa. Nigeria received over $92.1 billion in on-chain crypto value during the 2024-2025 measurement period, nearly triple the next African country. Adoption is driven by persistent inflation and naira depreciation, foreign currency access difficulties due to capital controls, stablecoin usage as a dollar-proxy for savings and remittances, and a large young, tech-savvy population with over 70% under 30.

Industry Focus

The Nigerian crypto ecosystem centers on exchange services, stablecoin-based remittances, and peer-to-peer trading. Stablecoins play a particularly important role, functioning as accessible dollar-denominated savings instruments in an environment of currency volatility. The SEC’s introduction of stablecoin-specific regulatory requirements under the ISA 2025, including licensing, reserve backing, and AML/KYC obligations for stablecoin issuers, reflects the sector’s significance. Crypto marketing rules introduced in mid-2025 require influencer approval and paid promotion disclosure, with penalties of up to N10 million or three years‘ imprisonment for violations.

Regulatory Evolution

Nigeria’s regulatory trajectory has shifted from restriction to structured supervision. The February 2021 banking ban, while not criminalizing crypto ownership, pushed the market underground into P2P channels. The December 2023 reversal and subsequent ISA 2025 represent a pivot toward regulating rather than prohibiting the sector. The Binance confrontation in early 2024, which included the detention of executives and removal of the naira from the platform, underscored the government’s willingness to take enforcement action against non-compliant operators.

Nigeria was placed on the FATF grey list in February 2023 for strategic AML/CFT deficiencies but was removed in October 2025 after completing a 19-point action plan, achieving Compliant or Largely Compliant status on 37 of 40 FATF Recommendations. Nigeria is a member of GIABA (Inter-Governmental Action Group against Money Laundering in West Africa), which conducted its mutual evaluation. The ISA 2025 is being discussed as a potential model for crypto regulation across Africa, particularly for its statutory classification of digital assets and structured licensing pathway through the ARIP programme.

For Current Information:

• Securities and Exchange Commission (SEC Nigeria)
• Central Bank of Nigeria (CBN)
• Nigerian Financial Intelligence Unit (NFIU)
• Federal Inland Revenue Service (FIRS)
• FATF – Nigeria Country Page