Category: Inside Africa

• By Kike Gbajumo

Nigeria’s first encounter with the digital frontier of finance was reactive rather than strategic, expressed through episodic controls instead of institutional design. That era of “episodic constraint” and “shadow regulation”—through circulars restricting bank and telecommunications access—has given way to a comprehensive legal and regulatory framework grounded in statute, fiscal oversight, and coordinated supervision. In its place, a new architecture of “sustained supervision” is being bolted together. But as any witness to the grinding gears of bureaucracy knows, the distance between enacting a law or promulgating regulations and a functioning system on the street is measured in friction, deadlines, and the cold reality of the calendar.

By formally bringing virtual asset regulatory coordination under tax administration by the future of Section 79 of the Nigeria Tax Administration Act 2025, the authorities have made a pragmatic calculation: digital assets are now too economically material to ignore. It is the classic sequence of power—first, you make the market observable; only then can you hope to stabilize it. Once observability is established, regulatory pressure typically shifts toward market hardening rather than suppression. But visibility is a double-edged sword. While the Securities and Exchange Commission has seen its jurisdiction clarified and constrained by Section 79, what emerges by statutory design is a model of “distributed supervision,” in which no single agency has eyes on the whole board. In such a system, coordination moves from being a nice-to-have to the difference between a functioning market and an administrative breakdown. What this architecture now requires is not further policy elaboration, but clear command intent to ensure that agencies whose mandates intersect act in sequence rather than at cross-purposes.

The pincer movement

It is against this backdrop of fragmented authority and tightening timelines that regulatory measures have begun to stack. The true story of this stage of the reforms is therefore in the dates. In effect, we have been witnessing a pincer movement, as fiscal, market-supervisory, financial-access, and security pressures converge under overlapping and time-bound regulatory calendars.

On January 16, 2026, the Securities and Exchange Commission issued Circular No. 26-1, materially raising the cost of entry into Nigeria’s digital asset market. Minimum capital requirements for Digital Asset Exchanges and custodians now stand at ₦2 billion, with a compliance deadline of June 30, 2027. Operators must recapitalise, consolidate, or exit.

This hardening coincides with parallel domestic and international pressures. Nigeria was removed from the FATF Grey List on October 24, 2025, following implementation of a 19-point action plan, but with continuing obligations to strengthen monitoring of virtual asset transactions and inter-agency intelligence coordination. At the same time, banks face a March 31, 2026, recapitalisation deadline under the Central Bank of Nigeria, while a December 2025 Memorandum of Understanding with France’s DGFiP underscores the growing international coordination of digital tax enforcement.

The ghost in the machine

The tragedy of poorly coordinated reform is that it doesn’t explicitly address the ghosts in the bureaucratic machine. These include procedural gaps and conditionalities that sit outside the direct permitting pathway. Consider the virtual exchange that clears the SEC’s ₦2 billion hurdle, only to find that banks refuse to host their accounts because CBN has not lifted the ban prohibiting banks from hosting accounts. A licence from the SEC risks becoming operationally meaningless if the banks, wary of risk and waiting for a “comfort” signal from the Central Bank isn’t forthcoming with the license. This is where the coordination imperative becomes a matter of survival. Fortunately, the Central Bank of Nigeria is a critical agency in regulating virtual assets.

Agencies such as the National Communications Commission (NCC) are not. They do not have direct oversight of virtual assets, but they play a key enabling role. Telecommunications pathways—the digital arteries that allow a customer to reach a platform—are pivotal. Unlike banks, which are regulated directly by the CBN—making the lifting of restrictions on bank accounts largely self-enforcing—the restriction on telecommunications access requires devolved action by the NCC, following direction from the wider security and financial-integrity apparatus.

The tax authorities, the securities regulator, the banks, and the telcos, therefore, need to move in a single, synchronised formation. Without this, the reform risks losing credibility. In a low-trust environment, gaps where an activity is legal in law but blocked by infrastructure are read by the market as a lack of institutional will, even where policy intent exists. Coming on the back of the controversy over the proper passage of the tax reform statutes and the MOU with France, getting this part of the operationalisation of Section 79 to roll out without a glitch is essential.

The final countdown

Calendar and coordination now converge, creating their own urgency. The foundational laws are—however controversially—on the books, and institutions are adjusting to the new Section 79 reality. What remains unannounced is the institutional mechanism to operationalise that coordination, even as sectoral reform implementation reaches a critical point in banking, capital markets, and international fiscal cooperation. Capital is being raised, and external scrutiny has intensified. But the final test will be found in whether a newly licensed digital firm can actually open a bank account and reach a customer via the internet. Coordination has become an essential condition for credibility. With overlapping regulatory calendars now in motion, the space for informal sequencing narrowed materially when the Nigeria Tax Administration Act came into force.

Since the formal lifting of CBN restrictions in late 2023, Nigeria has enacted at least three major pieces of legislation incorporating digital assets into multiple regulatory and fiscal regimes. Capital gains taxation, securities licensing, financial and compliance reporting, and revenue-led coordination are now grounded in statute. Yet despite this legislative momentum, residual access constraints have persisted in practice. The result has been a prolonged and expensive period of legal limbo for compliant operators, including firms admitted into regulatory pilot programmes, even as unregulated actors continue to serve the market. This divergence underscores what challenges remain. Simply put, it is the alignment of execution.

Ultimately, the Gordian Knot here is not legal but coordinative. The policy intent is clear, the statutory foundations are in place, and the relevant institutions are aligned. What remains unresolved is the authority to translate that intent consistently across organisational boundaries at a moment when mandates overlap, and institutional incentives diverge. In such moments, Nigerian reform has historically moved fastest when clear presidential direction reinforces sequencing and inter-agency alignment. Where the Commander’s intent is understood, execution follows.

– Kike Gbajumo, a Crypto Analyst, writes from Lagos