Cryptocurrency Regulations and Laws in Nigeria
Learn about cryptocurrency regulations and laws in Nigeria. Discover the legal status of crypto trading, taxation policies, banking restrictions, and how the Central Bank and SEC regulate digital assets in Africa’s largest crypto market.
Nigeria is one of the most active crypto markets in Africa despite regulatory challenges. While the use of cryptocurrencies is not outright banned, the government has taken a cautious and restrictive approach, especially toward financial institutions interacting with crypto-related entities.
Summary
Nigeria has a large and growing population of crypto users, particularly among younger citizens using digital assets for remittances, savings, and trading. However, the Central Bank of Nigeria (CBN) has issued directives limiting banks from facilitating cryptocurrency-related transactions. Meanwhile, the government launched its own digital currency — the eNaira — in 2021.
Legal Status
- General Use: Legal for individuals, but discouraged
- Trading: Permitted informally but restricted through banking bans
- Exchanges: Unregulated domestically; many operate offshore
- Mining: Legal but not widespread
- ICOs & Tokens: Unregulated; no formal guidance
- NFTs: Not officially addressed
Taxation
As of now, Nigeria has no clear crypto-specific tax legislation, but in 2022, the Nigerian Finance Act included digital assets in the scope of capital gains tax.
- Capital Gains Tax: Yes — 10% on profits from digital assets
- Income Tax on Crypto Earnings: Potentially applicable under general income rules
- Mining Taxation: Unspecified
- Reporting Requirements: Still evolving; no clear requirements for individuals
Regulatory Bodies
- Central Bank of Nigeria (CBN): Primary financial regulator; has restricted banks from dealing with crypto businesses
- Securities and Exchange Commission (SEC): Oversees digital assets that qualify as securities; issued draft regulations for digital asset offerings
- Federal Inland Revenue Service (FIRS): Responsible for tax collection, including digital asset gains
Key Regulations & Laws
- 2021 CBN Circular: Prohibited banks and financial institutions from facilitating cryptocurrency transactions
- 2021 SEC Framework (Draft): Proposed guidelines for digital asset offerings, crypto exchanges, and custodians
- 2022 Finance Act: Expanded the definition of taxable assets to include cryptocurrencies and other digital assets
Timeline of Regulatory Milestones
| Year | Event | Description |
|---|---|---|
| 2017 | CBN warning | Warned the public against cryptocurrencies |
| 2021 | CBN bank ban | Banks prohibited from servicing crypto-related accounts |
| 2021 | eNaira launch | Nigeria introduced its Central Bank Digital Currency (CBDC) |
| 2022 | Finance Act passed | Brought digital assets under capital gains tax |
| 2023 | SEC engagement | Continued work on digital asset regulations, including sandbox trials |
Resources
- Central Bank of Nigeria (CBN)
- Securities and Exchange Commission Nigeria
- Federal Inland Revenue Service
- CBN Circular on Crypto (PDF)
Notes
- Travel Tip for Crypto Users: Carrying large amounts of crypto or engaging in visible crypto-related business may invite scrutiny due to the financial sector ban.
- Local Adoption Trends: Peer-to-peer (P2P) trading is extremely popular via platforms like Binance P2P, Paxful, and KuCoin.
- Language Notes: Most official documents are in English.