1. Introduction
In early 2025, Nigeria's rapidly growing cryptocurrency sector reached a major turning point. After years of regulatory confusion and a well-known banking ban on crypto transactions, a new law changed everything. President Bola Ahmed Tinubu signed the Investments and Securities Act 2025 (ISA 2025) into law, officially recognizing digital assets and cryptocurrencies as securities. This landmark legislation replaces the previous 2007 statute and broadens the definition of "securities" in Section 357 to include virtual and digital assets.
Under the revised definition, Bitcoin, Ether, and other crypto tokens are no longer on the fringes of the financial world; they are now acknowledged as valid financial instruments under Nigerian law. The impact has been both immediate and insightful. By formally recognizing cryptocurrencies as an asset class, the new Act removes the uncertainty that once plagued the industry. It also ensures that individuals and businesses can engage with digital assets without fear of regulatory crackdowns or law enforcement interference.
At the same time, the law grants the Securities and Exchange Commission (SEC) clear authority to regulate virtual asset market activities, paving the way for exchanges and other innovators to operate more openly. In effect, Nigeria's virtual asset market has moved out of the shadows and into a regulated environment, an evolution that brings both relief and added responsibility.
In line with the above, this article examines how ISA 2025 transforms the landscape for digital asset operators in four key areas: granting legitimacy, mandating compliance, enhancing investor safeguards, and spurring innovation. It also compares Nigeria's approach to global best practices and reflects on the unique local factors that shaped this bold step forward.
2. From Uncertainty to Legitimacy: The Official Recognition of Crypto
Not long ago, Nigeria's crypto market operated in a legal gray area. In 2021 the Central Bank of Nigeria (CBN) famously prohibited banks from processing cryptocurrency transactions, pushing trading into informal channels. Exchanges adapted by ramping up peer-to-peer (P2P) marketplaces to connect buyers and sellers, and demand continued to rise. By 2022, Nigeria ranked second globally for peer-to-peer trading volume and was among the top five countries for crypto adoption. Such widespread enthusiasm made it clear that an outright ban was unsustainable and by late 2022, the CBN quietly reversed its stance, allowing banks to work with crypto firms under certain conditions, setting the stage for a more permanent solution.
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