Nigeria is on the verge of a major regulatory shift in its approach to digital assets, with plans to pass a new bill that would formally recognize Bitcoin and other cryptocurrencies as legitimate financial instruments. This legislative move marks a pivotal moment for Africa’s largest economy, signaling a strategic pivot toward embracing blockchain innovation and aligning with global financial trends.
A Strategic Shift in Financial Policy
At the heart of this transformation is the proposed amendment to Nigeria’s Investment and Securities Act of 2007, which, if passed, will empower the Nigerian Securities and Exchange Commission (SEC) to officially acknowledge cryptocurrencies and digital funds as valid forms of investment capital. This development comes at a time when public interest in decentralized finance continues to surge, despite earlier government resistance.
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The news was first reported by Punch Newspapers on December 18, following an interview with Babangida Ibrahim, Chairman of the House Committee on Capital Markets. Ibrahim emphasized that the bill is not about reversing past policies but about clarifying legal frameworks and defining institutional roles in the evolving digital economy.
“As I stated during the second reading, Nigeria needs an efficient and vibrant capital market. To achieve this, we must keep pace with global practices.”
This statement underscores a growing recognition that innovation cannot be regulated out of existence—especially in a country where grassroots adoption of crypto has remained resilient even in the face of official restrictions.
From Ban to Regulation: A Policy Evolution
In February 2021, the Central Bank of Nigeria (CBN) issued a controversial directive banning banks and financial institutions from facilitating cryptocurrency transactions. It further instructed them to close accounts suspected of engaging in crypto-related activities. At the time, the CBN cited concerns over financial stability, money laundering, and investor protection.
However, evidence suggests the ban had little impact on actual usage. On the contrary, cryptocurrency adoption in Nigeria surged after the restriction was imposed. Between January and August 2021, Nigeria ranked second only to the United States in Bitcoin trading volume. Moreover, Nigerians conducted more Google searches for “Bitcoin” than any other nation during that period—highlighting intense public curiosity and demand.
A April 2022 study by CoinGecko ranked Nigeria as the most crypto-obsessed country globally, driven largely by economic pressures such as high inflation, currency devaluation, and limited access to traditional investment vehicles.
Ibrahim clarified that the new bill does not represent a complete reversal of the CBN’s stance but rather a reevaluation of jurisdictional authority:
“This is not about lifting the ban. We are considering legality: what is legitimate, and what falls within our business framework in Nigeria.”
He explained that many early crypto investors operated outside the formal banking system, making them effectively beyond the CBN’s regulatory reach. The new legislation aims to bring clarity by clearly defining the roles of both the CBN and the SEC in overseeing digital asset activities.
The Struggles of eNaira: A Missed Opportunity?
The proposed crypto bill emerges against the backdrop of poor adoption of Nigeria’s own central bank digital currency (CBDC), the eNaira. Launched in October 2021, the eNaira failed to gain traction among the population. Just 12 months after its rollout, adoption stood at a mere 0.5%—a stark contrast to the widespread grassroots use of decentralized cryptocurrencies.
Experts attribute this lackluster performance to several factors: limited public awareness, lack of merchant integration, insufficient incentives for usage, and general distrust in government-managed digital systems. In contrast, peer-to-peer crypto platforms have thrived by offering practical solutions for remittances, savings, and cross-border trade.
The underperformance of eNaira has likely prompted policymakers to reconsider their approach—not by doubling down on top-down digital currency models, but by embracing market-driven innovations that Nigerians are already using.
Building a Crypto-Friendly Ecosystem
Beyond regulatory reform, Nigeria has taken concrete steps toward fostering a supportive environment for blockchain innovation. In September 2022, officials held preliminary discussions with Binance to explore the creation of a crypto-friendly economic zone—a dedicated hub designed to attract blockchain startups, developers, and investors.
Such initiatives reflect a broader vision: positioning Nigeria as a leader in Africa’s emerging digital economy. By providing clear rules and infrastructure support, the government hopes to channel the nation’s vibrant tech talent and entrepreneurial energy into sustainable blockchain ventures.
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Frequently Asked Questions (FAQ)
Q: Is Nigeria legalizing Bitcoin completely?
A: While full legalization is still evolving, the proposed amendment to the Investment and Securities Act signals strong movement toward recognizing Bitcoin and other cryptos as legitimate investment assets under regulatory oversight.
Q: Does this mean the CBN’s crypto ban is lifted?
A: Not necessarily. The new bill focuses on defining legal status and regulatory roles rather than explicitly repealing banking restrictions. However, it represents a shift from suppression to structured regulation.
Q: How will this affect everyday Nigerians?
A: Greater legal clarity could lead to safer investment environments, increased financial inclusion, and more innovation in fintech services—especially for youth and unbanked populations.
Q: What role will the SEC play under the new law?
A: The SEC would be authorized to regulate digital assets as investment instruments, including oversight of exchanges, token offerings, and investor protection measures.
Q: Could this boost Nigeria’s economy?
A: Yes. By formalizing the crypto sector, Nigeria can attract foreign investment, reduce capital flight, and create jobs in tech and finance—provided regulations are implemented effectively.
Q: When is the bill expected to pass?
A: As of now, no official timeline has been announced, but ongoing legislative discussions suggest momentum is building for passage in the near term.
Looking Ahead: Regulation Meets Innovation
Nigeria’s journey from crypto skepticism to cautious acceptance mirrors a global trend where governments recognize that digital assets are here to stay. Rather than resist technological change, forward-thinking nations are choosing to guide it through smart regulation.
For Nigeria, this bill could be a turning point—a chance to transform informal crypto enthusiasm into formal economic opportunity. With clear rules, institutional accountability, and inclusive policies, the country can harness blockchain technology to drive financial innovation, empower citizens, and strengthen its position in the global digital economy.
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The road ahead will require collaboration between regulators, industry players, and the public. But one thing is clear: Nigeria is no longer resisting the crypto wave—it’s learning how to ride it.