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Nigeria has consistently ranked as one of the
world's leading countries in cryptocurrency adoption,
second only to the United States in some metrics. Although
the term “Adoption” as used here
does not necessarily mean formal acceptance by the government and other financial
Institutions, this piece shall enlighten you on the actual stance of the
Government and its agencies on crypto-related transactions in Nigeria.
Ironically, to the ordinary citizens of
Nigeria, the term “Cryptocurrency”
isn’t just a buzzword anymore as it used to be in 2015 when the news about
crypto were mere rumors spread only in closed make money online forums. It has
now become a lifeline, an escape plan, a full time career and for some
Nigerians, the most practical response to a broken financial system. The appeal
of the crypto industry to Nigerians is deeply rooted in certain economic
realities. According to recent research, "distrust in political systems,
weak domestic currency, and high inflation rates" are identified as key
factors driving cryptocurrency usage in the country, with many individuals
viewing digital assets as "a tool for wealth preservation and inflation
hedge". This increased flare for crypto adoption
occurred despite regulatory pushbacks in 2021, demonstrating the strong demand
for alternative financial instruments in Nigeria's challenging economic
landscape.
This surge in popularity of digital assets in
the country stems from several economic factors that has affected and is still affecting
the nation. When Nigeria experienced its first recession in 25 years followingthe collapse in oil prices around 2015, many citizens turned tocryptocurrencies as a hedge against the inflation and the declining value ofthe naira. Nowadays, a lot of people across the country,
from the street-wise Lagos trader to the tech-savvy law student in Enugu, are
no longer just asking “What is
Bitcoin?” The adoption has gone past this stage. The big
question on people’s minds (which I
believe is in yours right now too) whenever they come across any crypto
related advertisement or post on the internet, social media or even while
walking along the road is “How do I
make the most out of this juicy opportunity presented by crypto here in Nigeria
without getting into any legal or financial troubles in the future?”
While the global media fixates on price actions of various cryptocurrencies, charts movements and pump-and-dump projects (a.k.a. Ponzi Schemes), what often goes undiscussed is this: “Nigeria is one of the few countries where cryptocurrency thrives NOT BECAUSE OF REGULATORY SUPPORT, BUT IN THE ABSENCE OF IT.” Even with regulatory obstacles, Nigeria's cryptocurrency market, and its widespread adoption among the citizens over the past decade, has shown remarkable resilience. The sector is gradually "shaking off itsassociation with scams and Ponzi schemes, and is on a path towards becoming aregulated element of the financial sector".
Nowadays, the Nigerian government appears to
be developing a “crush” on the crypto industry that they once antagonized and suspected
to be a channel and medium for economic and financial crimes. This transition
reflects both government recognition of crypto's widespread adoption and the
realization that prohibition proved ineffective at curbing usage.
However, what so many newbie crypto
enthusiasts and even profitable crypto traders (such as Ahmed XM, Brains Signals and the likes) who are already in
the crypto space and have been making really decent income all these while from
the crypto game don’t realize, yet, is that the journey of crypto in Nigeria is
gradually shifting and will soon be filled with not just tales of PnLs (Profit
and Losses), but also of legal ambiguity, policy U-turns, a silent power
struggle between regulators, and an undeniable thirst by the government to
exploit the succulent financial nectar secretly hidden in the crypto industry
through taxes, levies and other forms of government imposed charges.
“Just imagine this extreme fictitious scenario
where you are expected to make an account of all your profits since you started
your crypto journey and pay 10% of all as Personal Income or Capital Gains Tax.”
Sounds funny right, this is one rollercoaster
that will soon play out and we all have to watch out for.
In this blog, we’re going to examining what
the law actually says and not just what people think or fear (although I will definitely be talking about
that a lot here). However, I will guide you to discover whether crypto is currently
fully legal in Nigeria, how to protect yourself against any wonderful “breakfasts” that may be hidden in the
legislations regulating crypto transactions in the country, and what Rules
could change the game overnight for both the big and small players in the
industry.
I believe a proper start to this journey would
be “A Brief Look Back: The History of the
Crypto Industry in Nigeria” Continue reading…
SOURCES:
2. https://seybold-report.com/wp-content/uploads/2025/03/Durowoju96203.pdf
3. https://cryptoforinnovation.org/crypto-in-nigeria-surge-in-adoption-and-regulatory-shifts/
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