Nigeria Establishes Virtual Asset Council to Regulate Crypto Market

Nigeria’s President Bola Tinubu has moved to close persistent regulatory gaps in the country’s booming crypto market, signing an executive order that creates a coordinated oversight framework for digital assets — without stripping authority from existing regulators. Why it matters - The move comes as crypto activity in Nigeria surges: the IMF estimates about $59 billion in crypto-asset inflows between July 2023 and June 2024, and says Nigeria has accounted for roughly 60% of stablecoin inflows into sub‑Saharan Africa since 2019. Stablecoins are widely used by households and small businesses for remittances, cross‑border payments and currency hedging — but regulators say that growth is straining monetary and supervisory systems. What the order does - Rather than creating a new watchdog, the directive establishes a virtual asset council led by senior financial regulators. That council will coordinate policy and oversight across agencies responsible for banking, securities, tax and financial crime — while each body keeps its statutory powers and independence. - The framework adopts an activity‑based registration model: businesses will be registered and regulated according to the services they provide (exchange, payment provider, investment platform, etc.) and the types of assets involved. The goal is to close loopholes that allowed some unregistered operators to fall between agency mandates and avoid supervision. - The presidency says the framework is intended to protect users from fraud, support responsible innovation and preserve financial stability. Tax and reporting - The Nigerian Revenue Service (NRS) will publish guidance on how the order affects taxpayers. The executive order does not introduce new tax rates but brings tax enforcement for digital assets into the coordinated oversight structure. - Reporting measures are already in force: since early 2026, crypto service providers must link transactions to tax identification numbers — and in some cases national ID numbers — under the Nigeria Tax Administration Act 2025. That aligns Nigeria with the OECD’s Crypto‑Asset Reporting Framework (CARF), effective Jan. 1, 2026, which enables cross‑border information sharing on crypto transactions. Parallel legislative work - The executive action runs alongside parliamentary efforts to regulate digital assets. In June, the Senate advanced the Virtual Asset Service Providers Regulation Bill, 2026 (SB 956) at second reading. The bill would impose licensing, transparency and compliance rules on exchanges and other virtual asset businesses serving Nigerian users. - SB 956, sponsored by Deputy Senate President Barau Jibrin and presented in debate by Senate Chief Whip Mohammed Monguno, now goes to the Senate Committee on Capital Market for review, amendment and public input. It still needs committee approval, a third reading and other legislative steps before becoming law. What to watch - Further guidance from the NRS on tax treatment and reporting. - How the virtual asset council translates coordination into concrete registration and supervision requirements for exchanges, wallets and payment providers. - The Senate committee’s review of SB 956 and any changes that could affect licensing, consumer protections and compliance burdens. Bottom line Tinubu’s order is a coordination-first approach aimed at stamping out regulatory arbitrage while preserving each agency’s mandate. For crypto firms and users, it promises clearer rules and tighter oversight — and for policymakers, it’s an attempt to balance innovation in cross‑border payments with the risks highlighted by the IMF.