Tinubu signs executive order as Nigeria opens up to cryptocurrency

Nigeria's President Bola Tinubu has signed an executive order on virtual assets, potentially marking a significant shift in the regulation of cryptocurrencies, including stablecoins, in the West African country. According to the State House, the executive order, which is to take effect immediately, will "harmonise the regulation of virtual assets, strengthen cooperation among the nation's financial, revenue and capital market agencies, protect citizens from fraud and safeguard the integrity of the financial system while enabling responsible innovation". The executive order outlines the establishment of a "Virtual Asset Council" - chaired by the Central Bank of Nigeria (CBN) and also including the Nigeria Revenue Service (NRS), Securities Exchange Commission (SEC), Nigerian Financial Intelligence Unit (NFIU) and the Office of the National Security Advisor (ONSA). The Council will work "to develop a harmonised legal and institutional framework that aligns the sector with Nigeria's national security, economic and social objectives". The executive order also states that the CBN will establish a "sandbox" for virtual assets, providing a controlled environment in which operators can test virtual asset products and services under the oversight of regulators, which the government says "will help ensure that innovations that reach Nigerans have been properly examined and supervised". The tax authorities are also working on a dedicated policy for the virtual assets sector, with the federal government reportedly finalising a virtual assets white paper to "set out the country's longer-term policy direction and implementation priorities". Significance for stablecoins Rotimi Ogunyemi, a Lagos-based technology attorney, tells African Business that the new regulatory environment could have particular implications for Nigeria's stablecoin sector. Stablecoins - which purport to be backed 1:1 by hard fiat currencies such as the dollar - have become increasingly popular in Nigeria, though there have also been some high-profile collapses. "The executive order could bring more stablecoin and cross-border activity into regulated channels where customers have clearer protection," he says. "Stablecoins will be an important test: regulation should require credible reserves, separation of customer assets, reliable redemption and clear consumer protection." In the past, Nigerian authorities have treated virtual assets with suspicion and have sought to limit crypto adoption. In February 2021 the central bank banned financial institutions from processing crypto transactions and ordered them to close accounts linked to crypto trading. In 2024, amid a sharp depreciation in the value of the naira following President Tinubu's liberalisation of the foreign exchange market, the authorities accused crypto platforms of contributing to pressure on the naira exchange rate by allowing citizens to sell off their domestic currency outside official channels. Growing popularity But crypto has become increasingly popular in Nigeria in recent years, and the government has been gradually won around to its responsible use. According to financial technology firm Thunes, approximately 40% of Nigerians now use crypto for international money transfers, far exceeding the global average of 11%. The report notes that "this elevated adoption is closely linked to Nigeria's macroeconomic environment. Cryptocurrency is widely used both as a hedge against currency devaluation and a store of value, particularly in the context of persistent foreign currency shortages and restricted access to foreign exchange." With this new executive order, the Nigerian government has recognised the reality of crypto uptake in the country and is seeking to regulate rather than stifle the virtual assets space. "My overall view is that this is a potentially significant shift, but its value will be measured by a simple business question," Ogunyemi says. "Does it make it easier for a responsible company to know where to apply, obtain a decision, open a bank account and serve customers safely?"