Nigeria Establishes New Regulatory Framework for Virtual Assets

In a significant policy shift, Nigeria has moved to bring structure to its burgeoning virtual assets sector. President Bola Tinubu has signed an executive order focused on regulating virtual assets, which took effect immediately. The order seeks to create a cohesive national framework, addressing what was previously a fragmented regulatory landscape.

A Coordinated Multi-Agency Oversight Structure

The cornerstone of the new approach is the establishment of a Virtual Assets Committee, which will serve as the primary body for policy-making and inter-agency coordination. The committee's composition reflects a collaborative regulatory model:

  • Chair: The Central Bank of Nigeria (CBN) will lead the committee.
  • Vice-Chairs: The Securities and Exchange Commission (SEC) and the Federal Inland Revenue Service will serve as vice-chairs.
  • Operations: A dedicated Virtual Assets Service Office will be set up within the CBN to manage day-to-day inter-agency operations and information exchange.

Regulatory responsibilities are clearly divided based on the nature of the assets. The SEC will oversee activities related to securities, while the CBN will regulate payment, settlement, and custody services for non-security virtual assets.

Launching a Regulatory Sandbox to Foster Innovation

In a bid to encourage responsible innovation, the Central Bank of Nigeria plans to introduce a regulatory sandbox. This initiative will permit qualified operators to test their virtual asset products and blockchain solutions within a monitored environment. It represents a key effort to support technological advancement while maintaining oversight.

The newly formed Virtual Assets Committee has been tasked with developing a comprehensive implementation framework for the executive order within the next 30 days. This timeline indicates that more detailed rules and guidelines for market participants are forthcoming.

This regulatory enhancement signals Nigeria's intent to formalize its digital asset industry, aiming to curb unregistered operations, protect investors, and ensure financial system stability as adoption grows.