Lagos (Naija247news) – Nigeria is tightening its grip on cryptocurrency transactions as the government pushes for regulation and taxation of digital assets. The Securities and Exchange Commission (SEC) confirmed Tuesday that new rules are in progress to bring all eligible transactions under the formal tax system.
Thank you for reading this post, don't forget to subscribe!A proposed tax framework for crypto is currently before lawmakers and is expected to be approved this quarter. “The SEC acknowledges the substantial amount of tax revenue that will accrue from cryptocurrency transactions,” the regulator stated.
Nigeria’s crypto market is one of the largest in the world, driven by youth seeking refuge from inflation and the naira’s sharp decline. Since mid-2023, the currency has lost around 70% of its value against the dollar, prompting a shift toward Bitcoin and stablecoins for financial security.
President Bola Tinubu has prioritized fiscal reforms since taking office in 2023, aiming to boost revenue and narrow the budget deficit. In December, lawmakers approved a ₦54.99 trillion ($36.4 billion) budget for 2025. “We anticipate gradual traction toward centralized exchanges because they will provide greater protections and comfort for investors,” the SEC noted.
Nigeria Set to Issue First Crypto Licenses
The SEC is preparing to grant its first licenses for digital service providers and tokenized assets. SEC Director-General Emomotimi Agama emphasized the need to support fintech innovation:
“Being a crypto enthusiast and fintech enthusiast, I can tell you without doubt that this is going to happen sooner than you think. We must support the youths of this country to be able to achieve the benefit that is accruable in fintech. The market size is huge, and it is growing.”
The move aligns Nigeria with global trends, as countries like the European Union, South Africa, and Botswana have already implemented regulations following the 2022 crypto market crash.
However, Nigeria’s approach to crypto has shifted dramatically. Authorities initially banned banks from processing crypto transactions in 2021, citing concerns over naira manipulation. In early 2024, the government blocked Binance and arrested two of its executives, including Tigran Gambaryan, who spent months in detention over allegations of tax evasion, currency speculation, and money laundering.
The Central Bank of Nigeria (CBN) has also taken a firm stance. Governor Olayemi Cardoso accused Binance of enabling illicit naira transactions, leading to its shutdown. SEC Director-General Agama warned against market practices undermining national interests:
“SEC will not hesitate to utilize all the powers within its mandate to handle issues that are negative and pose a threat to national interest.”
Crypto and Economic Recovery Efforts
Nigeria’s government partly blames cryptocurrency for the naira’s 65% devaluation since June 2023, when it relaxed currency controls to attract foreign investors. Crypto transactions in Nigeria surged to $56.7 billion in June 2024, marking a 9% increase from the previous year, according to Chainalysis.
Meanwhile, Nigeria is on track to reclaim its status as Africa’s largest economy, with the National Bureau of Statistics set to release revised GDP figures next month, potentially pushing the economy close to $500 billion. Additionally, inflation eased to 24.5% in February from nearly 35% the previous month, creating room for possible interest rate cuts to boost consumer spending.
Despite ongoing economic struggles, including rising food and fuel prices, the Tinubu administration sees crypto regulation as a vital step toward economic stability and revenue generation.
