Nigeria’s cryptocurrency exchanges face a difficult regulatory transition as the Central Bank of Nigeria (CBN) introduces capital requirements of up to N15 billion for stablecoin issuers, while new tax obligations threaten to increase transaction costs and squeeze the margins of local digital-asset businesses, BusinessDay findings revealed.
The combination of higher capital thresholds, multiple taxation and stricter compliance obligations could force smaller indigenous platforms to seek fresh investors, merge with stronger competitors or scale down
operations, potentially reshaping competition in one of Africa’s largest cryptocurrency markets.
The pressure follows the CBN’s introduction of the Regulations for the Operations of Non-Security Virtual Assets in Nigeria, which took effect on November 5, 2026. The framework requires providers of other non-security virtual asset services, including exchanges, custodians, wallet providers and platform-facilitated peer-to-peer operators, to maintain minimum paid-up capital of N1 billion.
Read also: Explainer: What CBN’s new crypto rules mean for your wallet, P2P trades and stablecoins
Naira-referenced stablecoin issuers must maintain N10 billion, while foreign-currency-referenced stablecoin issuers face a N15 billion threshold. The N1 billion requirement is additional to capital already committed under a Securities and Exchange Commission (SEC) licence.
Existing operators have 180 calendar days to submit complete licence applications, leaving businesses with limited time to raise capital or restructure their operations.
The requirements coincide with the Nigeria Revenue Service’s (NRS) new cryptocurrency tax framework, which introduces a 1.5 percent stamp duty on qualifying fiat-to-token and token-to-fiat conversions, a one percent withholding tax on gross disposal proceeds for certain virtual assets and 7.5 percent value-added tax (VAT) on taxable services provided by virtual asset service providers.
For exchanges operating on relatively thin margins, the combined obligations could increase the cost of serving customers while requiring additional investments in regulatory compliance, reporting systems and financial reserves.
Mela Claude Ake, president of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), however, believes the CBN’s capital requirements are necessary to establish financial credibility and
protect customers.
Ake argued that businesses handling public funds and issuing stablecoins must demonstrate sufficient financial capacity to absorb potential operational failures and protect users.
Read also: Bitget brings stablecoin payments to Nigerians as crypto market expands
“The requirements on paid-up capital … are about ensuring that these entities have skin in the game and the financial capacity to truly play in the country’s financial space,” Ake told BusinessDay.
According to him, financial services should not be open to operators without the resources to provide adequate safeguards, particularly given Nigeria’s history of financial-sector failures.
“As a trained compliance officer myself, I am privy to some of these historical happenings. Regulators try as much as possible to avoid a repeat of those ugly incidents,” he said.
Ake acknowledged that some operators would struggle to meet the thresholds but said consolidation could provide a practical solution. “Operators may have to come together, pool their resources, and merge to form a stronger whole that can meet these thresholds,” he advised. He also advocated a tiered licensing structure under which operators would receive different permissions and transaction limits according to their financial capacity, similar to the framework used for conventional banks.
His position highlights the central policy dilemma: while stronger capital requirements could improve consumer protection, excessively high entry barriers could reduce competition and limit opportunities for smaller Nigerian technology companies.
Startups warn against suffocating innovation
Jude Ozinegbe, founder and chief executive officer of Cyberchain Consult, shares the view that stronger oversight is necessary but warns that the capital thresholds could concentrate the market in the hands of a few well-funded institutions.
Ozinegbe said the N15 billion requirement for foreign-currency-referenced stablecoin issuers was understandable from a financial stability perspective, but represented a significant barrier for indigenous fintech entrepreneurs and emerging stablecoin projects.
“My first position is that regulation must protect the market without suffocating innovation,” Ozinegbe said.
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He argued that capital requirements should reflect the actual risks and scale of individual businesses, taking into account transaction volumes, customer exposure and systemic importance.
A graduated, risk-based framework, he said, would allow smaller but credible innovators to participate while maintaining appropriate safeguards.
His concern is that businesses unable to meet the thresholds could move their operations to more favourable jurisdictions or rely on informal channels where transactions are harder for regulators to monitor.
This concern is particularly relevant to Nigeria’s peer-to-peer market, which has historically provided an alternative route for individuals seeking access to foreign-currency stablecoins and other digital assets.
Ake, however, offered a different interpretation of the CBN’s P2P provisions. He said the rules do not prohibit direct transactions between individuals but require third-party platforms facilitating P2P transactions to identify senders and receivers and make their activities traceable.
The distinction is important because the regulation targets platform-facilitated transactions rather than eliminating person-to-person exchanges.
Multiple taxes add to the industry’s burden
Beyond capital requirements, taxation could become another determinant of which platforms remain competitive.
Nigeria recorded $38.1 billion in cryptocurrency activity between July 2025 and June 2026, according to Chainalysis, making it Sub-Saharan Africa’s second-largest crypto market after South Africa, which recorded $39.3 billion.
Of the Nigerian figure, users sent $25.2 billion to crypto services, providing a potential channel for tax collection through exchanges and other intermediaries.
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An illustrative calculation suggests that if 10 percent of the $25.2 billion represented qualifying fiat-to-crypto conversions, the resulting $2.52 billion transaction base could generate approximately $37.8 million in stamp duty at the initial purchase stage.
If the same assets were subsequently sold through another qualifying conversion, an additional estimated $37.23 million could be collected, bringing potential collections across both stages to approximately $75.03 million.
This is a scenario rather than a revenue forecast, as not every crypto transaction attracts stamp duty and activity through private wallets, decentralised exchanges and offshore platforms may be difficult to
capture.
Nevertheless, the prospect of repeated charges raises concerns about the effect on customer behaviour, particularly among frequent traders who move between naira and stablecoins.
Domestic exchanges received $6.22 billion during the reporting period, representing half of Nigeria’s centralised exchange inflows, according to Chainalysis. Their growing share gives the government identifiable platforms through which it can monitor transactions and enforce applicable tax obligations.
However, higher transaction costs could weaken the competitiveness of domestic exchanges if customers increasingly turn to alternative channels.
Quidax, Busha position for regulated market
Despite the pressure, some established operators see stronger regulation as an opportunity to build institutional partnerships and improve confidence in digital-asset services.
Buchi Okoro, co-founder and chief executive officer of Quidax, said the future of the industry would depend on platforms demonstrating transparency, regulatory compliance and trust.
Okoro said banks, asset managers, fintechs and businesses across other sectors were increasingly exploring ways to offer digital assets to their customers. “Trust is the new currency,” he said, adding that digital businesses must earn confidence through regulation, transparency and consistent professional standards.
Read also: Binance freezes withdrawals after $6.3bn record crypto heist
Quidax, which received an approval-in-principle from the SEC, is positioning itself as an infrastructure partner for institutions seeking to enter the digital-asset market.
Busha has similarly emphasised its regulatory engagement, pointing to its participation in the CBN’s Virtual Asset Service Provider pilot programme and its existing engagement with the SEC and Nigerian Financial Intelligence Unit.
The company said its business model was designed around compliance, transparency and cooperation with regulators, while expressing readiness to deepen engagement with the CBN, NRS and other government agencies.
Its position suggests that businesses with established regulatory relationships and institutional infrastructure may be better positioned to navigate the changing environment.
The emerging regulatory structure could therefore produce a market in which financial strength, compliance infrastructure and access to institutional partnerships become as important as technology and customer acquisition.
Industry faces a consolidation test
The emerging regulatory environment could accelerate acquisitions and partnerships as smaller businesses seek ways to remain operational.
For operators unable to raise the required capital independently, mergers could provide access to stronger balance sheets, technology infrastructure and institutional relationships.
However, the cost of compliance extends beyond raising capital. The CBN requires existing operators to register within 30 days and begin
supervisory reporting within 60 days. Failure to secure approval
attracts a minimum fine of n100 million, alongside an additional n1
million for every day the violation continues, as well as possible
suspension.
The rules also require foreign-currency stablecoin issuers serving
Nigerian customers to operate through locally incorporated, CBN-licensed
entities, potentially changing how international stablecoin businesses
access the market.
Read also: Binance hack exposes risks in Nigeria’s $59bn crypto market
For the government, the opportunity is to improve visibility over a
multibillion-dollar market, strengthen consumer protection and expand
tax collections. For local exchanges, however, the challenge is
surviving the transition without losing customers to less regulated
alternatives.
The outcome will depend on whether regulators can maintain strong
financial safeguards while allowing credible indigenous businesses
sufficient room to compete.
With the 180-day compliance window already running, Nigeria’s crypto
industry is entering a decisive period that could determine whether its
next phase of growth is driven by a competitive local ecosystem or a
smaller group of financially stronger platforms.
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Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.
