Nigeria’s Landmark Digital Asset Legislation
Nigeria is positioning itself at the forefront of digital asset regulation in Africa with the recently passed Investments and Securities Act (ISA 2025). This landmark legislation, according to Emomotimi Agama, the director general of the Nigerian Securities and Exchange Commission (SEC), lays a robust legal foundation for the burgeoning digital asset ecosystem, promising clarity, protection and innovation.
“We anticipate this will provide a firm legal foundation for oversight of stablecoins and other digital assets,” Agama stated. Speaking at a summit on stablecoins held on July 24, the director general outlined three guiding principles shaping West Africa’s “forward-looking approach.” These are asset-backing, interoperability and market integration, as well as consumer and investor protection.
Under the new framework, all issuers of fiat-referenced digital tokens will be mandated to maintain verifiable reserves, subject to regular disclosures and independent audits, ensuring transparency and stability. The regulator also aims to foster seamless interaction between digital assets and the existing financial infrastructure, particularly for payments and settlements, promoting a more integrated market.
SEC’s Expanded Mandate and New Pathways for Growth
Until 2023, Nigeria largely lacked regulations or laws governing digital assets and a body specifically mandated with overseeing the cryptocurrency industry. This lack of clarity left existing financial regulators unsure which body had the legal mandate to oversee this industry.
However, ISA 2025 now explicitly codifies virtual assets, cryptocurrencies, tokens and investment contracts as securities. This grants the SEC a clear and unequivocal mandate to regulate virtual asset markets, fostering orderly development and bolstering investor protection. Already, two locally established digital asset exchange platforms, Busha Digital Limited and Quidax Technologies Limited, have received approval-in-principle from the SEC, with more firms joining the RI Program as part of the commission’s strategic phased licensing.
Meanwhile, Agama disclosed the country’s position on global digital asset exchanges, or virtual asset service providers (VASPs) seeking to enter the Nigerian market.
“Foreign-based VASPs seeking access to the Nigerian market will henceforth be subject to reciprocal recognition, backed by enforceable Memoranda of Understanding (MoUs) with their home country regulators, ensuring regulatory equivalence and market integrity,” Agama said.
Also, similar to steps being taken by regulators in the United Arab Emirates (UAE), the Nigerian authorities are working on a framework to regulate digital asset marketing and promotional activities. Under such a framework, promoters of digital assets will be required to obtain approval from the SEC, a step intended to shield retail investors from misleading or high-risk campaigns.
