Nigerian regulators are mandating that Virtual Asset Service Providers (VASPs) update their applications within 30 days to comply with new rules on digital asset issuance, platform offering, exchange and custody.
Nigeria updates crypto regulations
The Nigerian Securities and Exchange Commission (SEC) has announced plans to formally update regulations for important digital assets notice For the public. The amendments aim to strengthen the regulatory framework, ensuring that it is more comprehensive and adaptable to the complexities of digital asset markets.
As part of this regulatory modernization, the SEC introduced the Accelerated Regulatory Incubation Program (rip). This is a specialized compliance initiative designed specifically for Virtual Asset Service Providers (VASPs).
The program offers VASPs a structured path to compliance with new state regulatory standards.
According to information published on the Securities and Exchange Commission websitea dedicated qualification window was created to facilitate VASP providers’ participation in ARIP.
Additionally, the SEC stated that it will initiate enforcement action against any VASP asset service provider that does not comply with the guidance outlined in its circular.
This regulatory update is one component of Nigeria’s broader initiatives to strengthen oversight of the rapidly expanding cryptocurrency market.
after Appointment From Immotimi Agama as the new Director General of the Securities and Exchange Commission, one notable suggestion is Lifts Registration fees for cryptocurrency exchanges range from 30 million naira ($18,620) to 150 million naira ($93,000).
In conjunction with the SEC changes, the Central Bank of Nigeria (CBN) issued guidelines governing banking relationships and account operations for virtual asset service providers (VASPs) in the country.
This coordinated effort highlights Nigeria’s commitment to responsibly regulating the virtual assets ecosystem rather than imposing a blanket ban.
From prohibitions to taxes
Since 2021, Nigeria’s approach to cryptocurrencies has changed significantly. Initially, the central bank banned banks from facilitating cryptocurrency transactions due to concerns about money laundering and terrorist financing.
Despite this ban, adoption of cryptocurrencies continued to rise, prompting the government to focus towards a tax policy. Here is the schedule:
- February 5, 2021: The Central Bank of Nigeria (CBN) issued a circular directing banks, non-banking financial institutions and other financial entities to close accounts linked to cryptocurrency transactions within their systems.
- February 9, 2021: The Central Bank of Nigeria launched an investigation into financial institutions providing services to cryptocurrency traders.
- February 11, 2021: The Senate summoned the Central Bank of Nigeria and the Securities and Exchange Commission to discuss the potential impacts of cryptocurrencies on Nigeria’s economy and security.
- February 18, 2021: The International Monetary Fund (IMF) has backed the position of the Central Bank of Nigeria, highlighting concerns that cryptocurrencies could facilitate illicit activities. On February 22, 2021, the Securities and Exchange Commission emphasized the need to regulate cryptocurrencies.
- February 26, 2021: The Central Bank of Nigeria has clarified its position, stating that while individuals are not prohibited from buying and trading cryptocurrencies, they cannot do so through Nigerian banks or fintech platforms.
- April 7, 2022: The Securities and Exchange Commission (SEC) officially recognized digital assets as securities and issued comprehensive regulations governing the exchange and custody of cryptocurrencies within Nigeria.
- April 15, 2021: Discussions between the SEC and CBN on cryptocurrency regulation have continued, the SEC has confirmed.
- April 26, 2021: The Economic and Financial Crimes Commission (EFCC) has warned Nigerians about the risks of investing in Bitcoin (BTC).
- July 22, 2021: The Central Bank of Nigeria announced plans to launch “eNaira”, a central bank digital currency (CBDC), different from Bitcoin and other cryptocurrencies.
- October 25, 2021: Nigeria becomes the first African country to introduce its own digital currency “eNira”.
- December 2, 2022: Zainab Ahmed – Minister of Finance, Budget and National Planning – unveiled provisions in the latest Finance Bill to tax cryptocurrencies and other digital assets.
- May 28, 2023: Former President Muhammadu Buhari Occurred The Finance Bill, 2023 has passed into law, imposing a 10% tax on gains from the disposal of digital assets.
Despite the regulatory challenges it faces, Nigeria continues to emerge as a global leader in cryptocurrency adoption. The volume of crypto transactions in the country more By 9% on an annual basis to $56.7 billion between July 2022 and June 2023.
