The recent amendments aim to enhance the regulatory framework for digital asset markets in Nigeria. These changes are designed to be more comprehensive and adaptable, focusing on strengthening compliance for virtual asset service providers (VASPs). The Securities and Exchange Commission (SEC) has announced its intention to take enforcement actions against non-compliant VASPs, emphasizing the importance of adherence to the new directives outlined in its Circular.
This regulatory update is part of Nigeria’s broader efforts to improve oversight of its rapidly expanding cryptocurrency market. Additionally, the Central Bank of Nigeria (CBN) has issued guidelines governing banking relationships and account operations for VASPs in the country. This coordinated approach demonstrates Nigeria’s commitment to responsible regulation of the virtual asset ecosystem, moving away from blanket bans.
Initially, the central bank had banned banks from facilitating cryptocurrency transactions due to concerns over money laundering and terrorism financing. However, the recent developments illustrate a shift towards more structured and comprehensive regulation. A timeline of key events reveals the evolution of Nigeria’s approach to digital assets, including discussions in the Senate, support from the International Monetary Fund (IMF), recognition of digital assets as securities by the SEC, the introduction of Nigeria’s digital currency “eNaira,” and the disclosure of provisions for imposing taxes on cryptocurrencies and other digital assets.
Despite facing regulatory challenges, Nigeria continues to emerge as a global leader in cryptocurrency adoption, demonstrating resilience and adaptability in this evolving market.