Nigeria Prepares to License Virtual Asset Providers In Growing Crypto Adoption

Nigeria’s Securities and Exchange Commission (SEC) is taking significant steps to regulate the rapidly growing virtual asset market. With cryptocurrency adoption surging in the West African nation, the SEC plans to begin licensing issuers of virtual assets, including cryptocurrencies, as early as this month, according to Director-General Emomotimi Agama. This move marks a critical step for Nigeria as it seeks to keep pace with the global trend of formalizing the digital assets sector.

Regulatory Response to Growing Demand

Agama highlighted the increasing demand for cryptocurrencies in Nigeria, noting, “The market size is huge and it is growing.” As one of Africa’s most populous countries, Nigeria is experiencing a sharp rise in crypto usage, driven by a young, tech-savvy population. The SEC’s licensing initiative aims to bring much-needed oversight to the sector, ensuring that digital service and tokenized asset providers operate within a regulated framework.

This licensing move aligns Nigeria with other nations that have introduced similar regulatory measures. South Africa, the continent’s largest economy, recently launched its own crypto licensing regime. Meanwhile, France rolled out new regulations earlier this month, and the U.K. has been registering crypto companies under its anti-money laundering laws since 2020.

Nigeria is drafting more comprehensive legislation to control the cryptocurrency sector in addition to licensing. By September, a bill allowing the government to tax cryptocurrencies is anticipated to be adopted, further integrating digital assets into the country’s financial system. The SEC’s activities are a component of a larger initiative to establish authority over the quickly growing cryptocurrency industry.

At the same time, Nigeria is suing cryptocurrency exchange Binance, alleging money laundering and tax evasion. Due to connected allegations, one of Binance’s executives is presently in custody. These events demonstrate Nigeria’s increasing resolve to control the virtual asset market while preserving its financial stability.