Nigeria's Senate has passed a landmark cryptocurrency regulation bill through its second reading, moving the country closer to establishing its first comprehensive legal framework for digital assets. The bill has now been referred to the Senate Committee on Capital Market for a four-week review and public hearing before returning to the Senate with recommendations.
The Nigerian Senate has taken a significant step toward formalizing the country's digital asset industry by advancing a cryptocurrency regulation bill through its second reading. Presiding over the session, Deputy Senate President Barau Jibrin announced the bill's progression following a majority voice vote. The proposed legislation has now been referred to the Senate Committee on Capital Markets, which has been given four weeks to conduct public consultations and submit its recommendations.
If eventually passed into law, the bill would establish Nigeria's first comprehensive legal framework for cryptocurrencies and other digital assets.
Among its key provisions are mandatory licensing requirements for cryptocurrency exchanges, investor protection measures, and stronger anti-money laundering (AML) and counter-terrorism financing (CTF) obligations for digital asset service providers.
Lawmakers argued that despite Nigeria being one of the world's largest cryptocurrency markets, the sector has operated for years without clear legislation, exposing investors to fraud, cybercrime, and market manipulation.
Senate Chief Whip Tahir Monguno, who sponsored the bill, said the absence of a legal framework has allowed illicit activities to thrive while leaving legitimate investors without adequate protection. Other senators echoed similar concerns during the debate. Senator Shuaib Salisu warned that without proper regulation, cryptocurrency activity would continue to migrate into informal markets where transparency is limited and criminal activity becomes more difficult to detect.
Meanwhile, Senator Oyelola Ashiru questioned why Nigeria had fallen behind countries such as Kenya, South Africa, and Ghana, while Senator Adetokunbo Abiru emphasized the need to harmonize the proposed legislation with existing financial regulations to prevent overlapping regulatory responsibilities.
The proposed legislation has also drawn strong reactions from industry stakeholders. Rume Ophi, co-convener of Decentralized Nigeria and programs and communications lead at the Virtual Asset Service Providers Association (VASPA), described the bill as an important step but criticized Nigeria's prolonged delay in developing a regulatory framework.
According to Ophi, policy reversals over the past five years, including the Central Bank of Nigeria's 2021 banking restrictions on cryptocurrency businesses, slowed innovation and caused Nigeria to lose its leadership position within Africa's digital asset industry. He argued that while countries such as Kenya, South Africa, and Ghana continued building supportive regulatory environments, Nigeria spent years resisting an industry it had already become one of the world's largest users of. Ophi also urged the current administration to complete the regulatory reforms promised during President Bola Tinubu's election campaign, saying that clear legislation would help attract investors, entrepreneurs, and blockchain innovators to the country.
The Senate's approval of the cryptocurrency bill at its second reading marks one of Nigeria's most significant regulatory developments for the digital asset sector. Although the legislation must still pass committee review and additional legislative stages before becoming law, it signals growing political support for establishing a transparent and regulated crypto industry. If enacted, the framework could strengthen investor protection, improve regulatory certainty, and position Nigeria to compete more effectively with other leading digital asset markets across Africa.
