Blockchain 2025 Comparisons

The Nigerian blockchain market keeps evolving at a fast pace. Noteworthy is the recognition and regulation of digital assets and virtual assets as contained in the new Investments and Securities Act, 2025. Enacted on 31 March 2025, the Act symbolises the embrace of digital and virtual assets in the Nigerian financial system.

Additionally, the landmark partnership between the Nigeria Inter-Bank Settlement System (NIBSS), an affiliate of the Central Bank of Nigeria (CBN), and Zone’s Blockchain Network, announced in August 2024, brings blockchain into Nigeria’s core payment infrastructure, enabling real-time, decentralised point-of-sale (POS) transactions with improved transparency, efficiency and regulatory alignment.

Key Developments Expected in the Next 12 Months

Over the next 12 months, the blockchain market in Nigeria is expected to have a more precise regulatory framework, which is crucial for fostering investments in the Nigerian blockchain ecosystem.

Key developments to watch include:

• a possible collaboration between the CBN and the Securities and Exchange Commission (SEC) to establish a comprehensive legal framework for the blockchain market; and
• an increase in public awareness about the potential of the blockchain ecosystem in Nigeria.

Impact of Global Failures on the Nigerian Market

It is pertinent to mention that over the course of recent years, the collapse of FTX and other crypto-related failures have significantly impacted Nigeria’s blockchain market.

A notable instance is the disclosure by Nestcoin, a Nigerian Web3 start-up, that a substantial portion of its USD6.45 million in operational funds was held in FTX, leading to layoffs and a strategic pivot to its Onboard wallet platform.

Blockchain technology was initially adopted at a slow pace in Nigeria, but its uptake has accelerated as more sectors begin to recognise its potential. More notable is the rise in fintech start-ups exploring blockchain-based solutions to address practical, local challenges.

Recently, fintech companies such as Accelerex and ITEX joined Zone’s regulated blockchain network, allowing them to process POS payments directly on the blockchain. This shift is helping companies streamline transactions and reduce failures.

Promising Proofs of Concept and Announced Plans

The increase in public awareness of blockchain technology has resulted in some promising Proofs of Concept (PoC) and topping that list is Zone’s PoC for Zone POS – a blockchain-based POS system enabling direct card routing, same-day settlement, and automatic resolution of chargebacks, launched in June 2024.

In partnership with banks and NIBSS, they have processed over NGN1 trillion in transactions – a clear demonstration that the system is not just theoretical, but scalable and capable of handling high volumes of real financial activity.

Secondly, in a bid to strengthen control over its data and enhance security measures suited for the nation’s needs, the National Information Technology Development Agency (NITDA) announced plans for Nigeria to develop its own blockchain branded “Nigerium”. NITDA unveiled this plan in July 2024, to create an indigenous blockchain platform aimed at strengthening national data sovereignty and enhancing security. This initiative stems from growing concerns that dominant global blockchain infrastructures, are largely developed and governed by foreign entities whose interests may not align with Nigeria’s strategic goals. By building an indigenous blockchain, NITDA hopes to assert greater control over data management and foster trust in digital infrastructure rooted in local governance.

Use Cases and Common Applications

Some prominent use cases for blockchain have emerged in the country. These include, but are not limited to:

• peer-to-peer crypto trading;
• widespread use of stablecoins; and
• real-world asset (RWA) tokenisation.

The private cryptographic key linked with a digital wallet is typically used to identify who owns an asset on a blockchain. The person who holds the private key is the only one who can authorise its transfer on the blockchain and, as such, is effectively considered the owner of the asset.

Finality of Transfers on a Blockchain Network

A digital asset transfer on a blockchain is considered final once the network’s consensus mechanism has verified the transaction and added it to the blockchain. The transaction is then securely recorded and cannot be altered. Various blockchains use different consensus methods among network users.

In permissioned blockchains, where participation is limited to authorised users, finality can be rapid and is often immediate due to the presence of trustworthy validators. Permissionless blockchains, on the other hand, are open networks that everyone may join and use to verify transactions without requiring permission. Finality in these networks is probabilistic and is dependent on the number of additional blocks added.

In Nigeria, the SEC is primarily responsible for the determination of the characterisation of digital assets, which is carried out according to their economic purposes. In essence, the SEC classifies digital assets based on whether they serve as securities, commodities, or other assets forms.

According to the Investment and Securities Act (ISA) 2025, the definition of “securities” has been expanded to include virtual and digital assets. Virtual assets, digital assets and other distributed ledger technology (DLT) offers, tokens and products are all types of investments, all regulated by the SEC.

Challenges for Market Participants

Operators often face regulatory uncertainty, as classifications are not always straightforward. The involvement of multiple regulators (eg, SEC, CBN, NITDA) can lead to overlapping or conflicting guidance. Start-ups may also struggle with the technical and legal complexities of distinguishing between asset types and may incur high compliance costs while seeking clarity.

Approach to Classification and Clarification Process

The SEC adopts a substance-over-form approach, focusing on the actual use and benefit of the asset. Issuers may apply to the SEC for guidance, and the Commission will review the asset’s features to determine if it qualifies as a security by conducting a case-by-case assessment. This includes examining factors such as:

• whether the asset represents ownership;
• whether it offers potential financial returns; and
• whether it serves primarily as a means of exchange or access to services.

Tokenised securities are traditional financial assets that have been converted into a digital token on a blockchain. Put simply, tokenised securities are real world investments in digital form. These tokens are backed by real assets and are usually subject to the same regulatory standards as regular securities.

Regulatory Framework in Nigeria

In Nigeria, tokenised securities are subject to the same regulations as conventional securities. The ISA 2025 provides the SEC Nigeria with the primary legislative foundation for regulating securities, including tokenised and digital securities. These include disclosure requirements, investor protection rules and other compliance obligations, all overseen by the SEC.

Applicable Rules and Requirements

Since 2024, tokenisation in Nigeria has been regulated primarily by the SEC under the ISA 2025 and relevant SEC guidelines. Issuers of tokenised assets are required to register both the tokens and the offering with the SEC, while platforms facilitating such offerings must be licensed as Digital Asset Offering Platforms (DAOPs). Tokens are classified based on their economic function, as securities, utility or payment tokens, with uncertain cases requiring a no-objection application for SEC clarification. Issuers must submit a detailed white paper outlining the project, token utility, risks and governance. Tokens must be held by an SEC-approved digital asset custodian, and all participants must comply with anti-money laundering (AML) and know-your-customer (KYC) requirements. Regular reporting and disclosure obligations apply, including audited financials and material updates. Projects with innovative structures may also apply to participate in the SEC’s regulatory sandbox for controlled testing.

Digital assets pegged to the value of another asset, commonly referred to as stablecoins, are still in a grey area legally. There is currently no dedicated legal framework to regulate stablecoins and as such, they are primarily viewed based on their use; whether for payments, investments or trading.

In Nigeria, stablecoins are not explicitly defined by law but are classified based on their function. If structured as asset-backed or investment instruments, stablecoins may be treated as securities under the ISA 2025 and regulated by the SEC. In such cases, issuers must comply with SEC rules, including registration and disclosure requirements. Where stablecoins are used mainly for payments, they may fall under the CBN’s regulatory scope. However, the CBN currently restricts financial institutions from facilitating crypto-related transactions unless approved through its Regulatory Sandbox. Issuers are encouraged to seek regulatory guidance.

Distinction Between Types of Stablecoins

A distinction is typically made between fiat-backed stablecoins and algorithmic stablecoins, although formal legal definitions are still emerging. Fiat-backed stablecoins, like those backed by naira or US dollars held in reserve, are thought to be more stable and easier to regulate. Algorithmic stablecoins use formulas and software to adjust how many coins exist to keep the price stable. A famous (and failed) example is TerraUSD (UST), which lost its value in 2022.

Regulatory Developments and Future Outlook

Since 2024, Nigeria has made significant strides in regulating digital assets through the enactment of the ISA 2025, which brings virtual and digital assets under the SEC’s oversight. The SEC has also introduced rules for the issuance, custody and exchange of digital assets. Meanwhile, the CBN continues to restrict crypto-related transactions but allows controlled testing via its Regulatory Sandbox.

Looking ahead, Nigeria is expected to issue more targeted frameworks for stablecoins, tokenisation, and virtual asset service providers (VASPs), with a focus on investor protection, financial stability and innovation.

In addition to securities and stablecoins, there are other digital assets gaining traction in Nigeria. One of such is non-fungible tokens (NFTs), which are unique digital goods or rights stored on a blockchain and are frequently connected to digital art, music, collectibles or intellectual property. The underlying work (such as art, music, tweets) is protected by Nigeria’s Copyright Act and Cybercrime Act. The Nigerian law treats NFTs themselves as a form of intangible digital asset or property. In practice, buying an NFT means you own a token and a limited licence to a work, but the copyright stays with the creator. 

The SEC’s general approach applies to NFTs too. Commentators observe that “in view of” the SEC’s broad digital asset rules, an NFT could fall under SEC regulation if it is offered as an investment and the issuer fails to prove it is not a security. In other words, an ordinary collectible NFT would likely not be treated as a security (much like a painting), but if an NFT sale is structured like an investment contract (for example promising returns or dividends) then the SEC can deem it a security token. No Nigerian court has directly ruled on NFT status, so their legal classification is unsettled. 

Summarily, NFTs are intangible digital property under Intellectual Property and General Property Law, and they may become regulated as securities if used in investment schemes.

The use of cryptocurrencies in Nigeria is gradually moving toward formal recognition under a clearer regulatory framework. While the CBN had previously restricted financial institutions from engaging in crypto-related transactions due to concerns over money laundering, terrorism financing, and consumer protection, this position has evolved. On 22 December 2023, the CBN issued the Guidelines on Operations of Bank Accounts for VASPs, allowing banks to provide designated accounts to registered VASPs under strict compliance conditions.

Importantly, the ISA 2025 now explicitly includes digital and virtual assets within the definition of securities. This empowers the SEC to regulate token offerings, exchanges, and other digital asset services. As a result, the legal landscape is shifting toward coordinated oversight, with both the CBN and SEC playing active roles in regulating virtual assets.

Challenges and Limitations

Despite these developments, several barriers remain to the widespread use of cryptocurrencies for payments:

• limited public awareness, especially among older populations, hinders adoption;
• price volatility reduces the practicality of cryptocurrencies for everyday transactions;
• scams and fraud remain common, with many users falling victim due to lack of proper education; and
• poor infrastructure, including inconsistent electricity, limited internet access, and low smartphone penetration, restricts access in rural areas.

While growing regulatory clarity signals possible future adoption, meaningful progress will depend on enhanced public education, better infrastructure and full implementation of legal safeguards under the ISA 2025.

In principle, digital tokens can serve as collateral because they are explicitly treated as property in the 2023 Finance Act, which states that gains from disposing of cryptocurrencies should be taxed at 10% CGT. The constitution of the Federal Republic of Nigeria also allows moveable property as collateral.

There is no law forbidding pledging crypto or NFTs to serve as collateral. On the contrary, emerging crypto-lending platforms (local and global) do allow borrowers to lock up crypto as collateral for fiat loans. For instance, a Nigerian entrepreneur could deposit ethereum on a crypto platform and borrow naira against it.

Secured Transactions Act

Nigeria’s Secured Transactions in Movable Assets Act 2017 (STMAA) created a national collateral registry for movable collateral. Importantly, “moveable asset” is defined to include tangible and intangible property. This suggests that digital assets could qualify as registerable collateral under STMAA. However, banks and registries have not developed a clear process for listing cryptocurrency or NFT on the registry. Until the law or registry explicitly covers digital assets, lenders may be reluctant to accept them as collateral because they cannot easily register or enforce the charge.

Realistically, secured lenders (like banks) generally prefer collateral they can register and enforce. Since Nigerian law only recently recognised crypto and digital assets as securities and property, mainstream banks have been cautious. The CBN still restricts banks from holding cryptocurrency, so a bank could not physically take possession of a bitcoin. Thus, no mainstream bank currently takes cryptocurrency or NFTs as collateral for loans. 

Enforcement

In an event where a secured cryptocurrency collateral arrangement was made, enforcement would be challenging. There is currently no judicial precedent for cryptocurrency enforcement and as such, there are uncertainties as to the enforceability of such an arrangement.

However, it is safe to say that regulatory bodies and authorities have signalled openness to change as the 2025 ISA reforms and current guidelines for cryptocurrency service providers point to future integration. Nevertheless, any lending or repossession involving cryptocurrency and NFTs in Nigeria occurs in a legal grey zone.

A smart contract is a computer program that operates on its own when specific criteria are satisfied. It functions similarly to a digital contract that may be enforced without the need of an intermediary. On a blockchain, the contract executes itself after the rules are established.

There are currently no specific laws or regulations that directly regulate smart contracts. This only signifies that smart contracts must fit within Nigeria’s existing laws that guide contracts and commercial transactions. Some experts state that with no clear law, enforceability of smart contracts depends on applying traditional laws of contract.

Under the Nigerian contract law, a binding agreement must have an offer, acceptance, consideration (something of value exchanged), and an intention to be legally bound. Applying these requirements theoretically to smart contracts; parties agree on the terms of the contract in code, agree to execute them and then pay any blockchain fees or deposits as consideration. Legal analysts often argue that when these elements are all present, a smart contract should be enforceable like any other conventional contract.

However, there are concerns about what happens, for example, if the code has a bug, or if the parties disagree about the meaning of a coded term. As a result of these uncertainties and other, it is often advised to include a traditional written agreement or dispute resolution clause alongside any smart contracts.

Court Decisions and Judicial Precedents

There are no judicial precedents for smart contract cases in Nigeria, since no Nigerian court has yet ruled on this type of case. In practice, disputes over matters arising from blockchain transactions are usually resolved by the parties involved or settled out of court. It can safely be argued that the lack of cases in this regard stems from the fact that regulators have focused more on cryptocurrencies than on smart contract code. Nevertheless, with the daily trend of evolutions in the regulatory aspect of blockchain technology in Nigeria, there remains an optimism that stronger regulations will be put in place for smart contracts.

Views of the Legal Community in Nigeria

The Nigerian legal community generally treats smart contracts as a new form of electronic contracts (recognised under the Evidence Act 2011). There is currently no outright restriction on them. Some lawyers argue that if parties clearly intend to be bound, a smart contract code can be seen as a valid agreement. The key point remains, however, that there is no regulation that specifically denies the validity of smart contracts just as there is not one that accepts their validity.

In Nigeria, regulated firms and investment funds with exposure to digital assets are subject to specific regulatory consequences primarily under the ISA 2025 and the SEC’s Digital Assets Rules, which formally classify digital and virtual assets as securities.

Licensing and Registration

Entities dealing with digital assets including exchanges, custodians and issuers must be registered and licensed by the SEC.

Capital and Risk Management

Licensed digital asset firms are required to maintain adequate capital buffers and implement risk management controls to safeguard client assets.

Conduct of Business Rules

Firms must adhere to transparency and disclosure standards, including clear communication of risks associated with digital asset investments. Marketing and promotional activities are regulated to prevent misleading claims or undue inducements.

AML/CTF Compliance

Stringent AML and CTF measures apply, including customer due diligence, transaction monitoring and suspicious activity reporting.

Change in Control Notifications

Firms must notify and obtain SEC approval for significant changes in ownership or control, ensuring fit and proper assessments of new controllers.

Regulatory Sanctions for Non-Compliance

Failure to comply with these requirements can lead to penalties, suspension or revocation of licences, impacting a firm’s ability to operate legally in Nigeria’s digital asset space.

Within Nigeria’s regulatory sandboxes (eg, the SEC’s Accelerated Regulatory Incubation Program and the CBN’s fintech sandbox), certain regulatory requirements such as full capital adequacy rules, licensing timelines or some conduct rules may be temporarily relaxed or modified to allow innovative blockchain and digital asset propositions to be tested under supervision.

Nigeria is a budding market for emerging technologies in Africa; it has established regulatory sandbox initiatives specifically geared towards blockchain-based projects and digital assets.

The CBN launched its Regulatory Sandbox in 2023 to foster innovation in payment and financial services, including fintech solutions using emerging technologies like blockchain.

The Nigerian SEC introduced the ARIP in June 2024, a sandbox-like initiative specifically for VASPs and crypto start-ups. ARIP provides provisional licences to crypto firms, allowing them to operate under SEC oversight while the Commission finalises its digital asset rules.

Nigeria has implemented laws and standards aligned with international bodies such as FATF, particularly through the formal recognition and regulation of VASPs with respect to the regulation of blockchain and digital assets.

Some of these regulations include the ISA 2025, VASP Regulation and Licensing, AML/CFT Compliance Aligned with FATF Standards and CBN’s VASP Guidelines (2023) which have all been addressed in 4.2 Regulated Firms/Funds With Exposure to Digital Assets and 4.3 Regulatory Sandbox.

In addition, SEC requires foreign VASPs targeting Nigerian investors to meet certain conditions, including authorisation in their home jurisdictions and regulatory arrangements with Nigeria, promoting international regulatory co-operation consistent with FATF’s emphasis on cross-border supervision.

The following bodies are responsible for regulatory enforcement in Nigeria.

SEC

The SEC regulates digital assets classified as securities under the ISA 2025, including virtual assets, digital asset exchanges, custodians and issuers. It registers and licenses VASPs and enforces investor protection, market integrity and anti-fraud measures.

The SEC enforces registration, capital requirements, AML/CFT compliance and marketing restrictions. It also operates the ARIP, a sandbox for crypto start-ups to test products under supervision.

CBN

The CBN regulates financial institutions and their interaction with digital assets, including banks servicing VASPs. It issues guidelines on AML/CFT compliance for banks and VASPs and oversees currency stability and payment systems.

In 2021, CBN imposed a ban on cryptocurrency transactions by financial institutions. However, in December 2023, it issued the VASP Guidelines, permitting banks to service SEC-licensed crypto firms under strict compliance conditions.

Federal Ministry of Communications Innovation and Digital Economy (FMCIDE)

The FMCIDE oversees national digital economy policies and blockchain adoption strategies. It released Nigeria’s National Blockchain Policy aiming to promote innovation, digital identity and governance applications of blockchain technology.

Nigeria has a prominent self-regulatory organisation (SRO) for the blockchain sector called the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN).

SiBAN’s Role and Scope

SiBAN serves as a self-regulatory body formed by blockchain and digital asset industry players to promote a safer, friendlier and more transparent blockchain ecosystem in Nigeria. It establishes and enforces a Code of Conduct for VASPs and members, aiming to uphold ethical standards and protect investors.

SiBAN actively collaborates with regulatory bodies such as the SEC, NFIU and NITDA to advocate for favourable policies and regulations that foster responsible blockchain adoption.

SiBAN plays a key role in filtering fraudulent projects, unlicensed operators and unethical practices in the blockchain space, working closely with regulators to clamp down on illegal activities and enhance consumer protection.

The organisation emphasises transparency, safety and openness in blockchain transactions to minimise risks and build trust in the industry.

Nigeria has established governmental task forces and committees to explore the benefits and challenges of blockchain technology

The National Digital Economy Council (NDEC) championed the creation of a Blockchain Task Force (BTF), composed of key stakeholders from government, the private sector and academia, to develop strategies for blockchain adoption.

The NITDA has played a critical role, developing the National Blockchain Adoption Strategy and subsequently the National Blockchain Policy (approved in May 2023). NITDA also reconstituted the National Blockchain Policy Steering Committee (NBP-SC) in 2024 to domesticate blockchain technology to Nigeria’s specific needs.

The FMCIDE released a comprehensive White Paper on the National Blockchain Policy in 2025. This document outlines efforts to establish a structured, inclusive and forward-looking framework for blockchain adoption in Nigeria.

Findings

In Nigeria, blockchain is seen as a transformative technology to enhance transparency, efficiency, security and accountability in both public and private sectors.

The National Blockchain Policy identifies blockchain’s potential to improve service delivery in financial services, land registration, supply chain management and governance.

It highlights the need for capacity building, talent development, regulatory sandboxes and collaboration between the government, private sector and academia to foster innovation and adoption

Nigeria is a common law jurisdiction and within its legal system, there are currently no judicial decisions specifically interpreting or establishing a legal regime for blockchain technology.

However, there is an ongoing litigation involving Binance (with suit number FHC/ABJ/CS/1444/2024), where the FIRS alleges that Binance owes USD2 billion in taxes and USD79.5 billion in damages for its role in economic losses. It argues Binance’s strong presence in Nigeria makes it liable for 2022–2023 corporate taxes and related penalties.

The case is still being decided and the outcome of the case may have a significant impact on the taxation of digital assets and blockchain-based products or services.

In Nigeria, several enforcement actions and regulatory developments have clarified the “regulatory perimeter” for blockchain and digital asset activities, helping market participants understand permitted and prohibited conduct.

• The enactment of the ISA 2025, which classifies digital and virtual assets as securities, has been a watershed moment. It places crypto exchanges, VASPs and digital asset operators under SEC’s regulatory oversight, requiring registration and compliance with securities laws.
• The CBN’s 2021 directive prohibiting financial institutions from facilitating cryptocurrency transactions initially created regulatory uncertainty by pushing crypto activities underground. However, the CBN’s later issuance of VASP guidelines in December 2023 introduced a more nuanced regulatory approach, allowing banks to support crypto businesses licensed by the SEC under strict compliance conditions.
• The SEC has also emphasised combating fraudulent activities in the crypto space by imposing stringent penalties for Ponzi schemes and scams that exploit digital assets, reinforcing investor protection and market integrity.

At the time of writing, Nigeria’s tax regime is undergoing significant changes which may also affect how cryptocurrencies are taxed.

However, the Finance Act 2023 (the “Act”) updated the tax regime in Nigeria to consider blockchain and digital assets as taxable assets. The Act expands the definition of “chargeable assets” under the Capital Gains Tax Act (as amended) to include “digital assets”. This means that a sale, lease, transfer, assignment, compulsory acquisition or other disposition of such digital assets are subject to a 10% capital gains tax.

Uncertainties

Determining the fair market value of digital assets for tax purposes is difficult due to their market volatility. This complicates the calculation of taxable gains and income. Valuation of a digital asset is central to the computation of the tax payable upon its disposal.

The anonymous and decentralised nature of blockchain transactions makes it difficult for tax authorities to identify taxpayers and enforce compliance.

The SEC is currently aligning its rules with the ISA 2025, and full implementation of the regulatory framework for digital assets is ongoing in Nigeria. The corollary of this is an operational complication for stakeholders.

In Nigeria, there are no specific ESG or sustainable finance disclosure and reporting requirements explicitly applied to digital assets. The regulatory focus has generally been on consumer protection, the finance of terrorism and anti-money laundering compliance by financial institutions and designated non-financial businesses and professions. However, there are certain requirements under the ISA 2025, Money Laundering (Prevention and Prohibition) Act, 2022 and the NFIU Guidelines, 2024 that mandate all financial institutions to file reports of suspicious transactions to NFIU.

As concerns are mounting over the energy consumption, environmental pollution and greenhouse gas emissions arising from the mining and trade of digital assets, there is no publicly available evidence of Nigeria-specific initiatives or metrics for digital assets or their consensus mechanisms (such as energy usage or emissions).

Nevertheless, organisations like the OECD, IMF, UNCTAD have studied the environmental impact of digital assets, but such frameworks have not yet been adopted in Nigeria.

In Nigeria, the Nigeria Data Protection Act (NDPA) 2023 and its General Application and Implementation Directive (GAID), effective from 19 September 2025, are the primary data privacy laws governing personal data protection, including data processing involving blockchain-based products or services.

However, the NDPA does not expressly provide for the regulation of blockchain products and services. It provides for the general regulation of all entities processing and controlling personal data. In other words, the NDPA mandates careful consideration of individuals’ privacy rights, but it does not provide specific rules for blockchain technology.

Given the governmental enthusiasm and the increasing adoption of blockchain in Nigeria, amongst other reasons, GAID under Article 43 expressly provides for the regulation of blockchain, including data privacy rights relating to blockchain-based products and services.

In practice, entities using blockchain must implement privacy-by-design measures and explore technical solutions like off-chain storage or encryption to align with NDPA obligations.

For instance, Article 43 provides that an entity which deploys or intends to deploy blockchain for the purposes of processing personal data shall take into consideration the provisions of the NDPA and public policy. It must also set forth technical and organisational parameters for the processing, in order to design its products taking into account the:

• right of a data subject not to be subject to a decision solely based on automated processes or algorithms;
• right to be forgotten – and the possibility of using synthetic data or tokenisation of personal data which may not be amenable to this right;
• safeguards for the processing of sensitive personal data;
• safeguards for child rights and other vulnerable groups;
• regulation of cross-border data flows; and
• privacy by design and by default.