The Investments and Securities Act 2025 (ISA 2025) promised to end Nigeria’s crypto uncertainty. Twelve months on, here is what has changed and what hasn’t.
- The Investments and Securities Act 2025 (ISA 2025) promised to end Nigeria’s crypto uncertainty.
- Twelve months on, here is what has changed and what hasn’t.
- “The changes were informed by the need to strengthen market resilience, enhance investor protection, and align capital adequacy with the...
- It restricts reserves to cash, deposits, and short-term Treasuries and explicitly prohibits issuers from lending against reserves.
Keep reading for the full breakdown on blockchain regulation Africa — everything you need to know is covered below.
When President Bola Ahmed Tinubu signed the Investments and Securities Act (ISA 2025) in March 2025, it felt like a turning point. For the first time, Nigeria had a law that explicitly classified digital and virtual assets as “securities,” ending years of regulatory uncertainty that had pushed millions of Nigerians into risky peer-to-peer trading platforms.
As Olaniwun Ajayi LP noted in their April 2025 analysis, the Act “codifies the Securities and Exchange Commission’s (SEC) regulatory powers” over digital assets, a clear upgrade from the 2007 Act, which was written before crypto even existed.
But one year later, the verdict is more complicated.
What has actually changed?
Under ISA 2025, crypto is legal in Nigeria. The old question “Is this allowed?” now has a definitive answer. Digital asset exchanges (DAXs), custody providers, and token issuers must register with the SEC, which now has explicit statutory authority to license, monitor, and sanction players in the space.
The SEC has moved from issuing cautionary statements to actively raising the bar. In January 2026, the Commission increased the minimum capital for crypto exchanges to ₦2 billion, up from ₦500 million. Also, Digital asset offering platforms (DAOPs) must have ₦1 billion in capital.
“The changes were informed by the need to strengthen market resilience, enhance investor protection, and align capital adequacy with the evolving risk profile of digital asset activities,” the SEC stated in its January 2026 circular.
This indicates that the Nigerian authorities governing the sector want big, institutional-grade players, not startup experiments.
Olaniwun Ajayi LP saw the gap
The law firm’s 2025 analysis correctly identified a key weakness in the March 2025 crypto regulation: the Act does not define “virtual” or “digital” assets.
That omission leaves room for interpretive battles, especially around stablecoins and utility tokens that may not function as traditional securities.
The firm recommended a more nuanced framework, one that distinguishes between bona fide securities and payment mechanisms, such as stablecoins, which may better fall under the Central Bank of Nigeria’s purview.
A year later, that concern looks prescient. Stablecoin adoption in Nigeria has exploded, with businesses using USDT and USDC for cross-border payments, payroll, and even working capital, often outside traditional banking channels.
The International Monetary Fund has documented widespread use of stablecoins among Nigerian households and firms.
Yet the regulatory framework still treats most digital assets as securities. That one-size-fits-all approach may be straining at the seams.
The GENIUS Act comparison
The United States passed its own landmark crypto legislation in July 2025, the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins). The contrast with Nigeria’s ISA 2025 is instructive.
The GENIUS Act focuses narrowly on stablecoins. It restricts reserves to cash, deposits, and short-term Treasuries and explicitly prohibits issuers from lending against reserves. It does not try to classify all crypto as securities. Instead, it targets the specific risk stablecoins pose to the dollar system.
Nigeria took the opposite approach: a sweeping classification that brings everything under SEC oversight.
Neither is obviously “better” because Nigeria and the US face different problems. America worries about stablecoins displacing bank deposits. Nigeria worries about capital flight, currency substitution (traders preferring USDT to naira), and a parallel financial system that regulators cannot see.
As economist Eduardo Levy Yeyati, former chief economist of Argentina’s central bank, puts it: “When a Nigerian merchant accepts USDT instead of naira, that represents monetary demand that central banks can neither measure nor regulate”.
That is the real fear ISA 2025 was designed to address, and on that front, the Act has given regulators tools they never had before.
Has it brought innovation?
On one hand, the licensing pathway now exists. The SEC’s Accelerated Regulatory Incubation Program (ARIP) has onboarded exchanges like Busha and Quidax, granting them Approval-in-Principle to operate. Banks can now legally service licensed crypto firms, a direct reversal of the infamous 2021 CBN ban that froze accounts and crushed on-ramps.
On the other hand, the capital requirements are brutal. ₦2 billion (roughly $1.3 million at current exchange rates, though naira volatility complicates the math) is a high barrier. Smaller startups will struggle. Some analysts warn that these risks are “stifling innovation” and consolidating the market in the hands of a few well-funded players.
There is also the tax layer. The Nigeria Tax Administration Act 2025, which took full effect in January 2026, requires VASPs to submit monthly transaction reports to the FIRS and to link users’ NIN or BVN to their accounts. For traders, crypto gains are now taxable under the personal income and capital gains framework.
The verdict: progress, not perfection
For regulators, the Act has been transformative. The SEC now has legal control. It can license, inspect, freeze, and sanction. The days of crypto operating in a legal grey zone are over.
For investors, protections have improved, but only if you use licensed platforms. The warning from Olaniwun Ajayi LP still stands: the Act “does not provide a definition of a virtual or digital asset,” leaving room for regulatory interpretation that could shift over time.
For innovators, the picture is murkier. The capital requirements will filter out small players. That may be intentional; the SEC seems to want fewer, stronger operators. But Nigeria risks pricing out the very startups that could build the next generation of fintech solutions.
What Nigeria needs now is the next layer of rules: clear guidance on stablecoins, a taxonomy to distinguish security tokens from utility tokens, and a coordinated framework between the SEC and CBN that does not leave VASPs trapped between competing mandates.