The Nigerian Federal Government, through the Securities and Exchange Commission (SEC), has officially granted initial operational approvals to several cryptocurrency operators, marking a significant shift toward embracing digital currencies.
This move by the SEC follows a turbulent period for the crypto industry in Nigeria, marked by stringent crackdowns throughout 2024 after the government lifted its ban on official crypto transactions in December 2023. The government had previously blamed cryptocurrency operators for contributing to the naira's volatility, tax evasion, and potential links to terrorism financing.
On Thursday, August 29, the SEC announced that it had given approval in principle to two Digital Asset Exchanges under its Accelerated Regulatory Incubation Program (ARIP). This approval allows these exchanges to begin operations while under regulatory scrutiny.
Additionally, the SEC revealed that five firms—Busha Digital Limited, Quidax Technologies Limited, Trovotech Ltd, Wrapped CBDC Ltd, HousingExchange.NG Ltd, Dream City Capital, and Blockvault Custodian Ltd—have been accepted to participate in its Regulatory Incubation Program. This program will enable these companies to test their business models, products, services, and technologies in a real-world environment while being closely monitored by the regulator.
The ARIP was introduced to onboard firms that were already operational prior to the release of the Rules on Virtual Asset Service Providers in May 2022. The Regulatory Incubation Program is designed to assess the business frameworks of digital asset firms and ensure their compliance with regulatory standards.
This development comes on the heels of recent comments by Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), who indicated that the government is in the process of drafting an executive bill to regulate the cryptocurrency sector. "We need a law that regulates that area of our economy. This is why we are having this engagement with the legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria," Adedeji said.
The SEC stated that these initial approvals are a step toward granting full registrations, aiming to ensure proper oversight, investor protection, and transparency within the digital asset market.
Nigeria remains one of the largest peer-to-peer (P2P) cryptocurrency markets in the world. According to a report by Chainalysis, a global blockchain analytics firm, crypto transactions in Nigeria totaled $56.7 billion between July 2022 and June 2023, highlighting the significant role of digital currencies in the country’s financial ecosystem.
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