Nigeria postpones additional crypto licenses issuance - reasons explained
In a significant move for the African continent, Nigeria has formally recognised cryptocurrencies as securities under the newly enacted Investments and Securities Act (ISA) 2025. This legislation, signed into law by President Bola Ahmed Tinubu on March 29, 2025, places digital assets under the regulatory authority of the Securities and Exchange Commission (SEC), making the SEC the apex regulator for virtual asset service providers (VASPs), digital asset operators (DOPs), and digital asset exchanges (DAEs).
The SEC's comprehensive framework for cryptocurrencies, implemented in 2025, requires all crypto firms and promoters to be registered and licensed to ensure investor protection. This framework also empowers national banks to impose restrictions on digital asset transactions if deemed necessary. However, the licensing process for new crypto firms has faced delays due to enhanced due diligence measures, with the SEC prioritising thorough vetting to create a more structured and secure crypto ecosystem.
The regulatory environment now enforces strict controls on advertising and promotion. Influencers and promoters must only endorse SEC-licensed crypto firms, or face fines and possible imprisonment. This move aims to protect retail investors from scams and fraudulent schemes common in unregulated crypto markets.
Nigeria's strategic approach to cryptocurrency regulation is part of a broader strategy to foster innovation and growth in fintech and blockchain sectors, align with global regulatory standards, and tap into the substantial crypto economy. The country aims to integrate the formal crypto economy into its financial system, preventing illicit capital flight and enhancing economic benefits.
Meanwhile, the global stablecoin market is experiencing rapid growth. Circle's Euro Stablecoin (EURC) has seen its market cap jump from under $84M to over $198M between January and mid-April. Visa is reportedly set to join the global dollar network stablecoin consortium, while Tether has invested in Fizen to boost global stablecoin adoption. Standard Chartered predicts global stablecoin supply to hit $2 trillion by 2028.
Unfortunately, not all developments in the crypto space are positive. The too-good-to-be-true crypto platform CBEX has imploded, leaving Nigerians and Kenyans counting their losses after promising an impossible 100% monthly return on investments. CBEX is now refusing withdrawals and asking users to deposit more money to "unlock" their funds, a classic exit scam tactic.
Despite these challenges, the Nigerian blockchain sector is thriving. The country now accounts for 3% of the world's blockchain developers, with over 300,000 active builders in the space. Blockchain infrastructure firms in Nigeria raised $11 million in 2024, a 270% increase from the previous year. Nigerian blockchain startups secured $20 million in funding in 2024, according to a new report by Hashed Emergent.
In an effort to scale stablecoins through integration with traditional financial systems, Bleap has teamed up with Mastercard. Stablecoins dominated funding in Nigerian blockchain startups in 2024, with Nigerians receiving $24 billion worth in total.
Looking forward, the SEC's Director General, Emomotimi Agama, has announced a delay in issuing new crypto licenses due to the need for "due diligence" and "level three due diligence" before bringing additional firms into the regulatory fold. This cautious approach is designed to ensure market integrity and investor safety.
In a Q&A series, Morgan Williams of Blockradar discusses the company's launch out of beta, the rising importance of stablecoins in Africa, and what's next for the team. Resolv Labs has also raised $10M as crypto investor appetite for yield-bearing stablecoins soars.
As the global stablecoin market continues to grow, Nigeria's strategic approach to cryptocurrency regulation offers a model for other countries to follow, balancing innovation with investor protection and market integrity.
- Under the Investments and Securities Act (ISA) 2025, Nigeria has classified cryptocurrencies as securities, positioning them under the regulatory authority of the Securities and Exchange Commission (SEC).
- The SEC's regulatory framework for cryptocurrencies, implemented in 2025, necessitates registration and licensing for all crypto firms and promoters to ensure investor protection.
- National banks in Nigeria have the power to impose restrictions on digital asset transactions if deemed necessary, as per the new regulatory policy.
- The stricter regulations have resulted in delays in the licensing process for new crypto firms due to enhanced due diligence measures.
- Advertising and promotion in the crypto sector are now tightly controlled, with influencers and promoters only allowed to endorse SEC-licensed crypto firms to avoid fines and imprisonment.
- Nigeria's crypto regulation strategy aims to foster innovation and growth in fintech, blockchain, and startup sectors, while aligning with global regulatory standards and tapping into the substantial crypto economy.
- Globally, the stablecoin market is expanding rapidly, with Circle's Euro Stablecoin (EURC) and Tether investing in Fizen to boost stablecoin adoption.
- However, some crypto platforms like CBEX have collapsed, resulting in losses for Nigerian and Kenyan investors who fell victim to an exit scam.
- Despite these setbacks, Nigeria's blockchain sector is flourishing, with over 300,000 active blockchain developers and $31 million raised by blockchain infrastructure firms in 2024.