Towards bridging the regulatory rift inside Nigeria’s dual-track crypto sandbox

Nigeria’s regulators spent five years trying to ban a market that refused to die. Now they have given up, and joined it. President Tinubu’s July 17 executive order creates a Virtual Asset Council, chaired by the central bank and stocked with the securities regulator, the Securities and Exchange Commission (SEC) and the tax authority the Nigeria Revenue Service (NRS), to coordinate licensing of digital assets nationwide. The pivot is remarkable given that this started as a 2021 directive ordering banks to shun all crypto ties.

A need birthed by size Nigeria is Africa’s largest crypto market and has long needed to reconcile its enthusiasm for digital assets with its regulatory instincts. Between July 2024 and June 2025 alone, Nigerians conducted US$92.1 billion in on-chain transactions, making the country second only to India globally by adoption volume. However, these transactions have taken place in a legal grey area for years, with regulators dithering between outright hostility and cautious engagement.

Thus, Nigerians never stopped trading stablecoins peer-to-peer but just did it beyond the sight of Abuja. That led to the country becoming one of the world’s most crypto-active markets and left the naira competing with dollar tokens for everyday commerce. This is a monetary-policy headache that even the IMF has been vocal about. The Fund therefore had the simple request that platforms should be licensed, that reporting thresholds should be set for large conversions, and that the CBN and SEC should work from the same rulebook. The executive order is Tinubu’s answer.

The ISA and a token wager The more interesting bet in all these is cNGN, a naira-pegged stablecoin issued under Investments and Securities Act (ISA) 2025 and marketed as Africa’s first regulated token. With traction, this could keep value creation inside the naira system while still delivering the settlement speed that drove adoption in the first place. That is something dollar stablecoins cannot do. That is the difference between disintermediating the banks and co-opting them, and commercial lenders could yet end up as custodians of the reserves backing it, turning a threat into a fee line.

Investors response Investors should watch the capital math more than the diplomacy. The SEC’s January circular increased minimum capital for exchanges and custodians by four times to N2 billion (US$1.47 million), with easier requirements for lower tiers. With compliance running to June 2027, it is a consolidation trade dressed up as prudential regulation. Afterall, well-capitalised and often foreign-backed platforms such as Busha and Quidax already hold approvals-in-principle. While they are already above the bar, domestic fringe players either has to upscale fast or get bought. But none of this is finished. A parallel bill to hard-wire licensing into statute is still sitting in the Senate, and the executive order can be unwound as easily as it was signed. But the direction of travel is set.

Nigeria has concluded that regulating stablecoins beats losing the naira’s relevance to them. And for a market this size, that trade is more important than any single circular.