Are Crypto Payments Allowed in Nigeria? Current Rules Explained
Nigeria leads the world in peer-to-peer cryptocurrency transactions, handling over $92 billion in value between mid-2024 and mid-2025. But when you ask if crypto payments are actually allowed here, the answer isn't simple. The legality of crypto payments Nigeria depends on specific regulations. Crypto isn't legal tender in Nigeria, meaning you can't use it to pay taxes or government fees. However, the Investments and Securities Act (ISA) 2025, signed in March 2025, officially recognized digital assets as securities. This means crypto payments are legal for private transactions, but they fall under strict regulatory oversight.
Key Regulatory Bodies and Their Roles
Multiple government agencies manage crypto regulations in Nigeria. Here's how they work together:
| Regulatory Body | Role | Key Responsibilities |
|---|---|---|
| Securities and Exchange Commission (SEC) | Primary regulator | Licenses crypto exchanges, enforces Digital Assets Rules, oversees investment-related crypto activities |
| Central Bank of Nigeria (CBN) | Monetary policy | Approves bank services for SEC-licensed crypto businesses, ensures financial stability |
| Nigerian Financial Intelligence Unit (NFIU) | Anti-money laundering | Monitors crypto transactions for suspicious activity, enforces AML/CFT rules |
| Economic and Financial Crimes Commission (EFCC) | Law enforcement | Investigates fraud and illegal crypto schemes, works with SEC and NFIU |
Licensing Requirements for Crypto Payment Providers
Exchanges and Virtual Asset Service Providers (VASPs) must register with the SEC to operate legally. The licensing process includes rigorous checks for security, compliance, and financial stability. Platforms like Quidax and Busha received early approvals in 2024 after thorough vetting. Unlicensed operations face severe penalties: ₦10 million ($6,693) in the first month, plus ₦1 million ($669) for each additional month of delay. The SEC can also revoke licenses, shutting down non-compliant businesses.
Tax Rules for Crypto Transactions Starting 2026
Starting January 1, 2026, the Nigerian Tax Administration Act (NTAA) 2025 applies to crypto. Here's how it works:
- Profits from selling or exchanging crypto are taxed as property
- Individuals pay personal income tax on a sliding scale, capped at 25%
- Companies earning ₦25 million to ₦100 million annually pay 20% corporate tax
- Companies earning over ₦100 million pay 30% corporate tax
- All companies pay 7.5% VAT on transaction fees they charge
Industry experts call this a 'progressive' tax regime compared to other countries. It provides clarity while keeping tax burdens reasonable for legitimate users.
Practical Implications for Users and Businesses
Banks can now offer accounts and services to SEC-licensed crypto businesses. This makes it easier to move money between traditional banking and crypto platforms. However, international exchanges that don't pursue Nigerian licensing may block Nigerian users. Most retailers still don't accept crypto directly for purchases. Instead, Nigerians use crypto for remittances, savings, and P2P trading. The SEC's crackdown on Ponzi schemes has reduced fraud, but users should still verify platform licenses before transacting.
Frequently Asked Questions
Can I use Bitcoin to pay for goods in Nigeria?
While some online stores accept crypto, most physical businesses don't. The Nigerian government doesn't recognize crypto as legal tender, so you can't pay taxes or government fees with it. However, private transactions between individuals or businesses are allowed under SEC regulations.
Are banks allowed to handle crypto transactions?
Yes, but only for SEC-licensed exchanges. The CBN reversed its 2021 ban in December 2023, allowing banks to provide accounts and services to licensed crypto businesses. Unlicensed operations still can't use banking services, which helps prevent fraud.
What happens if I use an unlicensed crypto exchange?
Using an unlicensed exchange carries significant risk. The SEC can shut down the platform, and you might lose your funds. Additionally, transactions with unlicensed services could be flagged for money laundering investigations. Always check if your exchange has SEC registration before using it.
Do I need to pay taxes on my crypto holdings?
You only pay taxes when you sell or exchange crypto for profit. Holding crypto without selling isn't taxed. For example, if you bought Bitcoin in 2024 and sold it for profit in 2026, you'd owe personal income tax on the gain. Keep records of purchase prices to calculate taxable amounts accurately.
How does Nigeria's crypto regulation compare to other countries?
Nigeria's approach is more structured than many African nations but less restrictive than some global leaders. Unlike China's complete ban, Nigeria allows regulated crypto activities. Compared to the EU's MiCA framework, Nigeria's rules are simpler but still comprehensive. The focus on licensing and tax clarity helps legitimate businesses grow while cracking down on fraud.
