Nigerian Senate Advances Bill to Regulate Cryptocurrency and Protect Investors

Background and Purpose of the Legislation

The Senate on Tuesday advanced a bill aimed at establishing a clear legal and regulatory framework for virtual assets, digital assets, and virtual asset service providers (VASPs) in Nigeria. Sponsored by Deputy Senate President Barau Jibrin, the Virtual Asset Service Providers Regulation Bill, 2026 seeks to address gaps in the current system where rapid innovation has outpaced oversight.

Presenting the bill on the floor, Senate Chief Whip Mohammed Tahir Monguno emphasized the need to balance innovation with accountability. He highlighted Nigeria's position as one of the leading adopters of cryptocurrency globally, particularly among young people engaged in trading, fintech development, and blockchain activities.

Key Provisions and Objectives

The proposed law would introduce mandatory licensing, transparency requirements, and compliance standards for cryptocurrency exchanges and related service providers. Its main goals include safeguarding investors from fraud, reducing risks to the broader financial system, and aligning Nigeria with international standards set by bodies like the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).

Senators noted that without proper rules, loopholes have allowed fraudulent schemes to thrive, exposing users to significant losses. The bill does not aim to restrict creativity but to create a predictable environment where legitimate businesses can operate safely.

Senators' Contributions and Support

During the debate, several lawmakers voiced strong support. Deputy Senate Leader Oyelola Ashiru pointed out Nigeria's lag compared to peers like Kenya, South Africa, and Ghana in establishing structured regulations. Senator Adetokunbo Abiru called for harmonization with existing financial laws to ensure coherence across the sector.

Senator Shuaib Afolabi Salisu warned that weak oversight could push activities underground, while Senator Natasha Akpoti-Uduaghan highlighted the billions in potential investment currently limited by regulatory uncertainty. Senator Adams Oshiomhole described the bill as straightforward and necessary, reflecting broad consensus in the chamber.

Next Steps and Expected Impact

Following a voice vote, the bill passed second reading and was referred to the Senate Committee on Capital Market. The committee has four weeks to conduct further work, including public hearings, and report back to the full Senate.

If enacted, the legislation would represent Nigeria's first comprehensive framework dedicated to virtual assets and cryptocurrency operations. Proponents argue it will boost investor confidence, support economic diversification, and help position the country more competitively in the global digital economy while mitigating associated risks.