A new law signals Nigeria’s intent to position itself as a digital finance leader on the continent.
For the first time, virtual assets and investment contracts are formally recognized as securities in Nigeria, following the Investment and Securities Act (ISA) 2024 signed into law by its President Bola Tinubu.
This new legislation comes after years of regulatory uncertainty and tension between the Nigerian government and the burgeoning crypto community. In February 2021, the Central Bank of Nigeria (CBN) issued a directive prohibiting financial institutions from facilitating cryptocurrency transactions, citing concerns over money laundering, terrorism financing, and the lack of consumer protection. The ban sparked widespread outrage, particularly among Nigeria’s tech-savvy youth, who had increasingly turned to cryptocurrencies as an alternative store of value amid inflation and economic instability.
Despite the crackdown, Nigeria emerged as Africa’s largest cryptocurrency market by volume, ranking second worldwide behind India, with citizens finding creative ways to bypass the restrictions through peer-to-peer (P2P) trading.
In response to the persistent demand and growing global acceptance of digital assets, the government began reconsidering its position, culminating in the enactment of the ISA 2024.
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The new law provides long-awaited regulatory clarity, bringing Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges under the direct oversight of the Securities and Exchange Commission (SEC).
Nigerian financial analyst Olumide Adesina views this as a major breakthrough.
“The regulation brings clarity and affirms the input of digital assets in the Nigerian capital market,” Adesina says to FORBES AFRICA.
“The law would likely attract huge players in the global industry to engage directly by setting up a physical presence with Africa’s biggest crypto market. Finally, it will also widen tokenization usage built on traditional assets and intensify interest among the younger populace.”
While the move is celebrated for its potential to draw institutional investment, it also raises questions about the impact on grassroots innovation.
Nigerian crypto enthusiast Samuel Adebayo voices mixed feelings, noting that the legislation could have unintended consequences.
“This will likely accelerate institutional adoption of digital assets in Nigeria by providing legal clarity and investor protection. However, stricter compliance requirements may pose challenges for smaller crypto startups,” Adebayo explains to FORBES AFRICA. “While the framework enhances market legitimacy, its impact on innovation will depend on how regulations are enforced and adapted to industry needs.”
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