Over the past five years, Nigeria has experienced significant adoption of crypto assets, coinciding with successive declines in the value of the naira. The government, viewing these assets as contributing to the depreciation of the local currency, has decided to regulate the sector to restore order.

The Nigerian government is set to regulate the cryptocurrency industry by September 2024. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), announced this during the FIRS 2024 Stakeholders Engagement with the Senate and House of Representatives Committees on Finance on August 17.

The proposed legislation will address the regulation of cryptocurrency transactions, an area currently lacking legal oversight in Nigeria. "While we cannot ignore cryptocurrency as there is currently no law in Nigeria regulating it, there is a need for legislation to govern this type of transaction," he stated.

In parallel, the Securities and Exchange Commission (SEC) is encouraging virtual asset service providers to join its Accelerated Regulatory Incubation Programme (ARIP) to expedite their registration and compliance with the upcoming Digital Assets Rules.

Nigeria is currently Africa’s largest cryptocurrency market and one of the leading markets worldwide. According to New York-based research firm Chainalysis, the country ranked second in the 2023 Global Crypto Adoption Index that measures crypto adoption across the globe. The widespread adoption highlights the need for a legal framework that can both harness the economic potential of cryptocurrencies and address associated risks, ensuring that the sector contributes positively to Nigeria's economic development.

Hikmatu Bilali