The Nigerian crypto market has been one of the fastest growing crypto regions in recent years; yet despite this growth, regulation seems to be lacking. The latest report from Bloomberg has signaled that a shift may finally be on the horizon.

According to the report, the Nigerian Securities and Exchange Commission (SEC) is now seeking to regulate the digital currency market as the adoption of digital assets continues to rise across the country.

Regulation of Digital Assets in Nigeria: A New Era?

Bloomberg highlighted that the country’s regulatory body, based in Abuja, plans to issue licenses to virtual asset providers, including cryptocurrency exchanges, as early as this month. Director General Emomotimi Agama noted:

The SEC wants to provide a platform where people could do these things before and where we could get all the information we needed. (…) We need to empower the young people of this country to reap the benefits that fintech brings.

The move to regulate crypto comes at a time when the West African country is experiencing a surge in crypto-related activity, driven by a young and tech-savvy population eager to take advantage of the opportunities offered by fintech.

The SEC’s initiative is part of a broader effort to align Nigeria with other international jurisdictions that have already implemented regulatory frameworks for digital assets.

SEC Director General Agama stressed the importance of supporting the country’s youth in harnessing the benefits of fintech, noting that the size of the market is significant and still growing.

Citing data from Chainalysis, Bloomberg revealed that the growing adoption of digital currencies in Nigeria is evident, especially in its volume, which rose 9% to $56.7 billion in June 2023 alone.

However, Agama believes this figure represents only a fraction of actual market activity as many transactions go unreported.

Nigeria’s Cryptocurrency Backstory

Nigeria has a long history of cracking down on the cryptocurrency industry, such as in other regions. In 2021, the Central Bank of Nigeria (CBN) issued a statement banning banks in the region from facilitating cryptocurrency-related transactions.

This move by the CBN sparked a series of controversies among crypto users in the country, amid concerns over market manipulation of the naira, the country’s currency.

While they eventually found a way around the issue, the Nigerian government went even further with its measures to crack down on the region’s most widely used digital currency exchange, Binance, in February 2024.

Binance executives were prosecuted for allegedly contributing to the depreciation of the naira by engaging in speculative activities and failing to pay taxes.

Despite these strict measures, the country’s crypto community remains resilient, with growing adoption and continuity in circumventing the government’s strict measures against their beloved industry.

Main image created with DALL-E, chart from TradingView