In a landmark regulatory shift, Nigeria has officially classified cryptocurrencies and other digital assets as securities under the newly signed Investments and Securities Act (ISA) 2024, positioning the country to attract more investments while tightening oversight on the fast-growing crypto sector.
President Bola Ahmed Tinubu assented to the Act, which repeals the 2007 version of the Investments and Securities Act, expanding the legal framework to cover Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs), and Digital Asset Exchanges.
These entities are now mandated to register with the Securities and Exchange Commission (SEC) and adhere to its regulatory guidelines.
The move signals Nigeria’s evolution from initial resistance to digital currencies, particularly after their surge post-2015 oil crash, to embracing a more structured and transparent approach. It is expected to foster greater trust, curb fraud, and stimulate innovation in blockchain technology and the fintech sectors.
Describing the development as “a transformative step,” SEC Director-General Emomotimi Agama said the new legislation would open up the capital market to responsible crypto investments, enhance investor protection, and bring Nigeria in line with global regulatory standards for digital finance.
The formal recognition of digital assets as securities marks a turning point in Nigeria’s financial regulation and could help the country emerge as a leading hub for crypto innovation and blockchain-based financial services in Africa.
Bitcoin and other cryptocurrencies became a safe haven for many Nigerians, pushing Nigeria to become the second-largest holder of cryptocurrencies globally, after the United States.
The surge in demand for digital currencies, however, intensified the pressure on the naira exchange rate.
In response, the Central Bank of Nigeria (CBN) ordered banks to close all accounts associated with cryptocurrency transactions, in a move aimed at stifling the trade.
Traders shifted to underground operations, relying on peer-to-peer (P2P) exchanges to continue business. Binance, a major global crypto exchange, quickly adapted, offering P2P services to Nigerian users.
When President Bola Tinubu assumed office in mid-2023 and appointed Olayemi Cardoso as CBN governor, the government eased its stance on cryptocurrencies, signaling a possible shift in Nigeria’s regulatory approach to digital assets.