Nigeria’s Securities and Exchange Commission (SEC) has revealed plans to fast-track the approval of cryptocurrency licences in 2025.
Aimed at bringing more oversight to the country’s growing digital asset market while ensuring stronger consumer protection, the decision follows the introduction of the Accelerated Regulatory Incubation Programme (ARIP) in June 2024, which has already granted provisional licences to two Nigerian crypto platforms, Quidax and Busha.
Traditional banks across Africa are beginning to show newfound interest in cryptocurrency, shifting away from their previous reluctance to engage with digital assets.
Chris Maurice, CEO of Yellow Card Financial Inc., recently noted that financial institutions that once avoided crypto discussions are now reaching out to explore opportunities in the space. He attributes this shift partly to the recent inauguration of U.S. President Donald Trump, who is perceived as crypto-friendly.
Maurice believes this change in the U.S. could increase regulatory clarity across Africa, encouraging governments to move faster in defining their crypto frameworks.
With Nigeria ranking first globally in stablecoin usage and second in overall crypto adoption, there is a growing belief that clearer regulations will further boost the market, hence, aligning with SEC speeding up crypto licensing in the country.
At a recent workshop in December 2024, an insider revealed to TechCabal that the SEC intends to “move a lot quickly” in issuing more licences in the coming year.
Nigeria is one of the most active cryptocurrency markets globally, with individuals and businesses using digital assets to shield themselves from inflation and foreign exchange volatility. However, the absence of clear regulations has left many investors and users uncertain about the risks involved.
A survey by Busha found that nearly half of 1,500 respondents—both crypto users and non-users—highlighted security issues as a big reason for hesitating to adopt digital assets. Many worry about losses from trading errors on centralised exchanges, high transaction fees, and the increasing number of scams in the market.
Among the most common scams are rug-pulls, where creators inflate the value of a new token and sell off their holdings, leaving investors with massive losses.
“Scammers thrive the most in the crypto space; if you find ways to take advantage of those who don’t know what they’re doing, that’s where you make the most money,” said Chibunna Kingsley, a crypto trader based in Lagos. “It’s right for people to feel unsafe.”
Nigeria’s regulatory journey with crypto has been long and evolving. The SEC first introduced a framework for digital assets in September 2020, enhancing it further in 2022 to define how cryptocurrencies should be classified under securities laws. By March 2024, updated guidelines mandated all virtual asset service providers to register with the SEC.
The ARIP programme, launched in June 2024, allows crypto startups to obtain provisional licences while regulators assess their compliance and consumer protection measures. The programme is a diversion from Nigeria’s previous anti-crypto stand, which saw banks prohibited from engaging with crypto companies until the ban was lifted in December 2023.
Even with this progress, banks are hesitant about working with crypto businesses. Some financial institutions offer services to crypto startups under the guise of “investment companies,” avoiding direct recognition of their involvement in digital assets.
A banker who requested anonymity explained, “The challenge is that banks don’t directly associate with crypto companies. They simply work with them as investment companies.”
The Licensing Process and Industry Expectations
Under the ARIP, both local and foreign crypto startups—including Quidax, Busha, Yellow Card, Borderlesspay, and Bitnob—have applied for licences. The application process involves paying a ₦200,000 assessment fee and a ₦2 million non-refundable processing fee.
One of the applicants, Quidax, was the first to secure a provisional licence in August 2024 after a thorough review by the SEC. Tobenna Igweonu, a lawyer representing Quidax, described the process: “We answered questions on the SEC’s e-portal, paid the application fee, and participated in a demo where we demonstrated how funds flow through our platform.”
SEC officials also evaluated their security protocols, focusing on fraud prevention and suspicious transaction monitoring.
Once licensed, companies are expected to transition to full Virtual Asset Service Provider (VASP) status after a year, provided they meet all compliance requirements.
What’s Next for Crypto in Nigeria?
The plan of the SEC to accelerate crypto licensing in 2025 could strengthen investor confidence and encourage institutional participation in the crypto space across Nigeria. Again, clearer regulations may ensure crypto taxation, a policy the Nigerian government has been considering since 2022.
Experts believe that Nigeria’s approach to crypto regulation is among the most ambitious in Africa. “The ARIP remains one of the boldest efforts by any regulator in Africa to oversee the crypto sector,” said Chuta Chimezie, a member of the Nigerian Blockchain Committee.
However, concerns remain about overregulation potentially driving crypto businesses to relocate to jurisdictions with more favourable policies. In Nigeria, the SEC is ready to maintain a balance between consumer protection and industry growth through speeding up the crypto licensing approval process, though how this balance will be achieved remains uncertain.
