The Federal Inland Revenue Service (FIRS) of Nigeria is set to introduce a landmark bill aimed at regulating the burgeoning cryptocurrency sector by the end of 2024. This move is part of a comprehensive effort to modernize Nigeria’s taxation and financial systems, reflecting the country’s rapidly evolving economic landscape.
Zacch Adedeji, the Executive Chairman of FIRS, made the announcement during a recent stakeholder engagement session with the National Assembly’s Finance Committees. According to a report by Vanguard, Adedeji emphasized the need for new legislation to manage the risks associated with cryptocurrencies while also leveraging their potential benefits for the Nigerian economy. The bill, which is expected to be introduced in September, marks a significant step in Nigeria’s efforts to align its regulatory framework with the growing influence of digital assets.
“The introduction of this bill is not just about regulating the cryptocurrency sector but also about ensuring that our taxation system remains relevant in a rapidly changing economic environment,” Adedeji stated. He further called for collaboration between FIRS and lawmakers to ensure the successful implementation of the bill, which could pave the way for more structured and secure operations within Nigeria’s crypto market.
Senator Mohammed Musa, Chairman of the Senate Committee on Finance, echoed Adedeji’s sentiments, highlighting the importance of cryptocurrency as a revenue-generating tool for the nation. “Cryptocurrency has become the largest way of making money,” Musa remarked, adding that the new regulations would help Nigeria harness this potential to fund infrastructure projects and human capital development.
The push for cryptocurrency regulation in Nigeria comes on the heels of increased attention from the country’s financial authorities. Wale Edun, Nigeria’s Finance Minister, has been vocal about the need for tighter oversight in the crypto sector. He has tasked the recently inaugurated Securities and Exchange Commission (SEC) board with developing a comprehensive regulatory framework for digital assets.
Approved by President Bola Tinubu in April, the seven-member SEC board has already begun implementing a compliance program aimed at bringing cryptocurrency businesses in line with local regulations. Additionally, the commission is planning to revamp its digital asset issuance process to include Virtual Assets Service Providers (VASPs), ensuring that the sector is adequately regulated and that investor interests are protected.
Nigeria’s focus on regulating cryptocurrency is also part of a broader strategy to integrate blockchain technology into its economy. The National Information Technology Development Agency (NITDA), which oversees the country’s IT sector, has recently restructured the National Blockchain Policy Steering Committee. This government-appointed body is responsible for overseeing the implementation and regulation of blockchain technology within Nigeria, a move that underscores the country’s commitment to embracing digital innovation.
In line with these efforts, NITDA has disclosed plans to establish research centers across Nigeria, focusing on key technologies such as blockchain and artificial intelligence. These initiatives are part of Nigeria’s broader strategy to modernize its economy and position itself as a leader in the adoption of cutting-edge technologies.
Cryptocurrencies have increasingly become a financial lifeline for many Nigerians, especially in light of the country’s ongoing economic challenges. As citizens seek alternative means to preserve their wealth, the importance of a regulated crypto market has become more apparent. However, the sector’s rapid growth has also raised concerns about the potential for illicit activities, highlighting the need for a robust regulatory framework.
Nigeria’s proactive approach mirrors similar moves by other African nations, such as Ghana, which has also introduced draft guidelines to address the challenges posed by cryptocurrencies. As Nigeria prepares to implement its own regulations, the country could set a precedent for other developing nations looking to balance innovation with security in the digital asset space.
