Nigeria has taken a pivotal step toward formalizing its cryptocurrency ecosystem by granting operational approvals to several digital asset firms. The Securities and Exchange Commission (SEC) announced the approval-in-principle of two Digital Asset Exchanges under its Accelerated Regulatory Incubation Program (ARIP), marking a significant shift from previous regulatory skepticism to structured acceptance.
This development underscores Nigeria’s growing commitment to integrating blockchain technology and virtual assets into its formal financial system. With crypto transactions in the country reaching $56.7 billion between July 2022 and June 2023 — according to Chainalysis — the move positions Nigeria as one of the most active peer-to-peer (P2P) crypto markets globally.
Regulatory Pathways: ARIP and RI Programs
The SEC introduced the Accelerated Regulatory Incubation Program (ARIP) for firms already operating before the release of the Rules on Virtual Asset Service Providers in May 2022. This initiative allows established players to transition into compliance under close regulatory supervision.
Simultaneously, the Regulatory Incubation (RI) Program enables emerging firms to test their business models, products, and technology in real-world conditions while adhering to evolving regulatory standards.
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Under these frameworks, seven companies have been formally accepted:
- Busha Digital Limited
- Quidax Technologies Limited
- Trovotech Ltd
- Wrapped CBDC Ltd
- HousingExchange.NG Ltd
- Dream City Capital
- Blockvault Custodian Ltd
Among them, Busha Digital Limited and Quidax Technologies Limited are now recognized as Nigeria’s first provisionally licensed crypto operators — a milestone that signals growing legitimacy for the sector.
A Shift from Crackdown to Regulation
Earlier in 2024, Nigerian authorities intensified scrutiny on crypto platforms, citing concerns over naira volatility, tax evasion, and potential links to terrorism financing. However, this latest approval reflects a strategic pivot: from suppression to structured oversight.
The Central Bank of Nigeria (CBN) lifted its informal ban on cryptocurrency transactions in December 2023 and transferred regulatory authority to the SEC. Since then, efforts have focused on creating a balanced framework that fosters innovation while protecting investors and maintaining financial stability.
Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), recently confirmed that an executive bill is being drafted to overhaul revenue administration — including formal regulation of the crypto industry.
“We need a law that regulates that area of our economy… We will regulate it in a way that is not injurious to the economic development of Nigeria,” Adedeji stated.
Experts interpret this as a clear signal that Nigeria aims to harness crypto’s economic potential rather than suppress it.
Why Regulation Matters for Nigeria’s Crypto Future
With over 60 million internet users and a young, tech-savvy population, Nigeria is ripe for digital financial transformation. Analysts argue that bringing crypto into the regulated economy can unlock major benefits:
- Increased tax revenue: Formal tracking of transactions enables better taxation.
- Investor protection: Licensing ensures platforms meet security and transparency standards.
- Financial inclusion: Crypto offers alternatives for unbanked populations.
- Global investment appeal: Clear regulations attract foreign capital and fintech partnerships.
Senator Ihenyen, Lead Partner at Infusion Lawyers and head of its blockchain practice, emphasized:
“Nigeria can no longer afford to keep pushing digital assets underground for obvious economic and security reasons. Our regulators will now work together to ensure consumer protection and investor safety.”
Approved Firms and Their Roles
The cohort approved by the SEC includes a diverse mix of service providers:
- Two Digital Asset Exchanges (Busha, Quidax)
- Four Digital Asset Offering Platforms
- One Digital Asset Custodian (Blockvault)
These roles are critical in building a full-stack digital asset ecosystem. Exchanges facilitate trading, offering platforms support token launches (such as STOs), and custodians provide secure storage solutions — all essential components of a mature market.
Michael Adeyeri, CEO of Busha, shared his optimism via Twitter:
“I am pleased to announce that Busha has been granted one of the first provisional licenses… We’ve been engaged with the process for over five years, ensuring our systems prioritize security and compliance.”
This long-term engagement highlights the seriousness with which leading firms have approached regulatory alignment.
Ongoing Oversight and Future Outlook
The SEC stressed that these approvals are provisional, serving as precursors to full registration. Only firms operating under ARIP or RI programs are legally authorized to conduct crypto-related business in Nigeria.
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To maintain oversight, the commission will monitor weekly and monthly trading data from Virtual Asset Service Providers (VASPs), including:
- Crypto ATMs
- Exchanges
- P2P platforms
- Custodial services
Additional applications are currently under review, with approvals granted on a case-by-case basis upon meeting compliance requirements.
Frequently Asked Questions (FAQ)
Q: What does "approval-in-principle" mean for crypto firms in Nigeria?
A: It means the firm has met initial regulatory requirements and can operate under supervision while working toward full licensing. It's a transitional step within the ARIP or RI Program.
Q: Is cryptocurrency legal in Nigeria now?
A: While not fully legalized like traditional currencies, crypto operations are now permitted under strict regulatory oversight through the SEC. Only approved platforms may legally offer services.
Q: How does Nigeria’s new approach compare to other African countries?
A: Nigeria is emerging as a regional leader in proactive regulation. Unlike countries with outright bans or unclear policies, Nigeria is building a structured framework similar to South Africa and Kenya.
Q: Can individuals still use P2P crypto trading freely?
A: Yes, but only through SEC-approved platforms. Unregulated P2P activity remains discouraged and potentially subject to enforcement actions.
Q: Will this boost Nigeria’s economy?
A: Yes. Regulation can increase investor confidence, attract fintech investment, improve tax collection, and reduce illicit use — all contributing to broader economic growth.
Q: Are stablecoins or CBDCs part of this approval?
A: Wrapped CBDC Ltd is among the approved firms, suggesting exploration of central bank digital currency integration. Stablecoin usage may expand under regulated frameworks.
Conclusion: Building a Responsible Crypto Economy
Nigeria’s latest regulatory actions mark a turning point — from ambiguity to structured innovation. By embracing digital assets through controlled incubation programs, the SEC is laying the foundation for a transparent, secure, and inclusive crypto economy.
As global interest in blockchain grows, Nigeria’s proactive stance could serve as a model for other emerging markets seeking balance between innovation and oversight.
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With core keywords naturally integrated — Nigeria crypto regulation, SEC approvals, digital asset exchanges, ARIP program, crypto licensing, VASP oversight, peer-to-peer crypto, and blockchain innovation — this shift not only enhances domestic financial resilience but also positions Nigeria at the forefront of Africa’s fintech evolution.