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President Buhari of Nigeria officially validates digital currencies, granting them legal status within the country's borders

Bola Ahmed Tinubu officially legitimizes cryptocurrencies by signing the Investments and Securities Act 2025, positioning crypto assets under the jurisdiction of the Nigerian Securities and Exchange Commission.

Nigeria's President has legally acknowledged digital assets through the enactment of a new law.
Nigeria's President has legally acknowledged digital assets through the enactment of a new law.

In a significant move towards modernising its financial sector, Nigeria has enacted the Investments and Securities Act (ISA) 2025, introducing far-reaching reforms, particularly in the realm of cryptocurrency regulation and taxation.

The ISA 2025, signed into law by President Bola Ahmed Tinubu on March 31, 2025, broadens the legal definition of securities to encompass virtual and digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and digital currencies. This recognition offers legal protection to owners, innovators, and investors in these assets, fostering innovation and confidence in the cryptocurrency space.

The Act mandates stricter regulation of digital platforms dealing with such assets, aiming to enhance transparency and investor safeguards. The Securities and Exchange Commission (SEC) is empowered to penalise fraudulent operators, including those involved in Ponzi schemes, which are common in unregulated crypto ventures. This includes stronger whistleblower protections and penalties to deter fraudulent activities.

While the ISA 2025 primarily focuses on regulation, the recognition of cryptocurrencies as securities implicitly establishes a foundation for tax authorities to incorporate digital assets into the taxable base, such as capital gains or investment income tax. The formal inclusion of cryptocurrencies as recognized securities may lead to clearer tax guidelines and enforcement, although specific tax provisions would come under separate fiscal laws and regulations beyond the ISA text itself.

The Act aligns Nigeria with global financial standards by modernising its capital market laws to accommodate fintech innovations like blockchain and tokenization, including real estate tokenization and AI-powered trading. It aims to restore and strengthen investor trust by creating a transparent, regulated environment that mitigates risks from scams and frauds, particularly in the fast-evolving digital asset ecosystem.

The ISA 2025 also establishes investor protection funds and broadens the investment scope for private equity and venture capital, further stimulating financial market growth. Two local exchanges - Busha and Quidax - have already received provisional licenses to operate in Nigeria due to the SEC's regulatory drive.

However, it is unclear if the proposed amendments on crypto taxation are included in the just-assented ISA 2024. The ISA 2025 supersedes the previous ISA 2007 Act, marking a significant shift in Nigeria’s approach to cryptocurrencies by legally recognising virtual assets as securities, instituting stronger regulatory oversight, and enhancing protections against fraud. This paves the way for safer innovation, clearer market participation rules, and eventual integration of cryptocurrency taxation within the national framework.

  1. The broadened legal definition of securities in the ISA 2025 includes digital assets like crypto, NFTs, and digital currencies, offering legal protection to their owners and innovators, thereby fostering investment and innovation in these assets.
  2. To enhance transparency and safeguard investors, the ISA 2025 mandates stricter regulation of digital platforms dealing with such assets, including penalising fraudulent operators in the crypto space.
  3. The recognition of cryptocurrencies as securities under the ISA 2025 provides a foundation for tax authorities to incorporate digital assets into the taxable base, such as capital gains or investment income tax, although specific tax provisions may come under separate fiscal laws.
  4. By modernising capital market laws to accommodate fintech innovations like blockchain and tokenization, the ISA 2025 aims to create a transparent, regulated environment that restores and strengthens investor trust, particularly in the digital asset ecosystem.
  5. The ISA 2025 establishes investor protection funds and broadens the investment scope for private equity and venture capital, thereby stimulating financial market growth, and two local exchanges - Busha and Quidax - have already received provisional licenses due to the SEC's regulatory drive.

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