Nigeria's SEC to License Virtual Asset Providers, Enhancing Regulatory Framework for Cryptocurrencies

 

The Securities Exchange Commission (SEC) of Nigeria is set to introduce licensing for virtual asset providers, including cryptocurrencies, in a bid to harness the sector's burgeoning opportunities while ensuring robust investor protection. This announcement marks a significant step as the adoption of digital assets continues to rise across the country.

In an interview with Bloomberg, Emomotimi Agama, the SEC’s Director-General, disclosed that the commission plans to issue its first licenses for digital services and tokenized assets within this month. Agama, a proponent of cryptocurrencies and fintech innovation, conveyed confidence in the initiative, stating, “This is going to happen sooner than you think.”

Agama highlighted the importance of supporting Nigeria's youth, who are actively engaged in the fintech sector, and acknowledged the substantial market potential of digital assets. “The market size is huge and it is growing,” he observed.

The SEC's new licensing framework aims to formalize digital asset activities, providing a structured environment for regulation and data collection. While the SEC supports fintech and cryptocurrency innovation, Agama emphasized that the commission will not tolerate any use of cryptocurrencies to disrupt or manipulate Nigeria’s currency.

This regulatory development follows several key changes in Nigeria’s cryptocurrency landscape. In December 2023, the Central Bank of Nigeria (CBN) lifted its ban on cryptocurrency transactions, signaling a policy shift. However, the federal government subsequently imposed restrictions on Binance, a major cryptocurrency exchange, due to regulatory issues.

Additionally, in May, the SEC announced its intention to delist the naira from all peer-to-peer (P2P) platforms, including Binance, in an effort to combat market manipulation. Agama revealed that Nigeria’s cryptocurrency market is currently valued at over $400 million, with projections indicating a rise in crypto transaction volume to $52.5 million by 2028—a 12.66 percent increase from 2024.