Nigeria’s Senate has moved a bill to regulate cryptocurrencies and other digital assets to its second reading, in a bid to tackle fraud, protect investors and strengthen the country’s digital economy.
The proposed Virtual Asset Service Providers Regulation Bill 2026 seeks to establish a legal framework for the operation of cryptocurrencies, digital assets and virtual asset service providers in Nigeria.
The bill, sponsored by Deputy Senate President Jibrin Barau, would require cryptocurrency exchanges and other operators in the sector to obtain licences and comply with transparency and regulatory requirements.
Presenting the bill before lawmakers on Tuesday, Senator Tahir Monguno said Nigeria had fallen behind several African countries in regulating the rapidly growing digital finance industry despite being one of the continent’s leading markets for virtual assets.
Lawmakers backing the proposal argued that regulation would help protect investors from fraud and exploitation while preserving the opportunities created by the growing cryptocurrency ecosystem.
According to supporters of the bill, failure to regulate the sector could have serious consequences for the country’s economy.
“There are three challenges if we don’t regulate,” one senator said during the debate.
“First, the market goes underground into a black economy. Second, it remains opaque and vulnerable to criminal activities. Third, it undermines the contribution of the digital economy to President Tinubu’s $1 trillion economy target.”
Supporters of the legislation stressed that cryptocurrencies and virtual assets have become an unavoidable part of the global economy and warned that Nigeria risks missing out on significant economic opportunities without clear rules governing the sector.
The proposed legislation seeks to align Nigeria’s regulatory framework with international standards set by the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).
Addressing concerns that regulation could hinder innovation, the bill’s sponsor insisted that the objective was to create certainty rather than restrictions.
“This bill does not seek to stifle innovation,” Barau said.
“Rather, it aims to create clear rules that promote order, confidence, accountability and consumer protection.”
Senator Natasha Akpoti-Uduaghan argued that the lack of regulation was already pushing Nigerian technology entrepreneurs to establish operations abroad.
She cited the example of a digital gaming platform operated by her son, saying the absence of the necessary infrastructure and regulatory environment was limiting opportunities within Nigeria.
“There are billions of dollars flowing into virtual services globally,” she said.
“Young Nigerians are creating jobs and generating income through gaming and other digital platforms. It would be a mistake not to put the necessary regulations in place.”
Former Edo State governor Adams Oshiomhole also backed the proposal, describing the benefits as obvious.
“Whatever needs to be said has been said. The benefits are self-evident. We should support the bill and allow it to proceed,” he told lawmakers.
Meanwhile, Senator Adetokunbo Abiru called for the legislation to be harmonised with existing financial laws, including the Investments and Securities Act and the Bank and Other Financial Institutions Act.
“If we regulate crypto in isolation, we risk creating confusion. We need a coordinated framework for the entire digital finance industry,” he said.
Closing the debate, Barau said the legislation would provide legal protection for investors and operators while encouraging innovation and economic growth.
“This innovation can contribute positively to our economy, but the players within the sector must be protected by law to prevent exploitation and ensure accountability,” he said.
The Senate subsequently referred the bill to its Committee on Capital Market for further legislative scrutiny. The committee is expected to submit its report within four weeks.
If passed into law, Nigeria would join Kenya, South Africa and Ghana in establishing comprehensive regulatory frameworks for cryptocurrencies and virtual assets. The law would also empower regulators to license operators and tackle fraud, money laundering and terrorism financing within the sector.