The Senate on Tuesday passed the Virtual Asset Service Providers Regulation Bill, 2026 for second reading, signalling a major step towards establishing a legal framework for cryptocurrency and digital asset operations in Nigeria.
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Lawmakers said the proposed legislation would protect investors, curb fraud and criminal activities, and unlock the economic potential of the rapidly growing digital asset sector.
The bill, sponsored by Deputy Senate President Senator Jibrin Barau, seeks to establish a comprehensive regulatory and supervisory framework for virtual assets, digital assets and Virtual Asset Service Providers (VASPs), while making licensing, transparency and compliance mandatory for cryptocurrency exchanges operating in the country.
Leading debate on the bill, Senator Tahir Monguno, who presented it on behalf of Barau, noted that Nigeria has remained behind several African countries in regulating the digital finance ecosystem despite recording one of the highest rates of cryptocurrency adoption on the continent.
According to him, the absence of a clear legal framework has exposed investors to risks and allowed illicit activities to thrive in the sector.
Lawmakers who spoke in support of the measure described virtual assets as an inevitable feature of the modern global economy, warning that continued regulatory gaps could drive investments and business activities into unregulated channels.
They argued that effective regulation would protect millions of Nigerians, particularly young entrepreneurs and traders, who depend on cryptocurrency and related technologies for employment and income.
Barau said the country’s leadership in virtual asset adoption comes with significant regulatory challenges.
He identified the dangers of allowing the sector to operate without oversight, noting that unregulated activities could encourage black-market transactions, facilitate criminal conduct and limit the sector’s contribution to the Federal Government’s target of building a $1 trillion economy.
The Deputy Senate President stressed that the bill was designed to provide clarity and confidence for operators and investors rather than stifle innovation.
According to him, the proposed law seeks to establish order, accountability, consumer protection and transparency within the ecosystem.
The legislation is also expected to align Nigeria’s regulatory framework with international standards prescribed by the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).
Contributing to the debate, Senator Natasha Akpoti-Uduaghan highlighted the impact of inadequate regulation on Nigeria’s technology industry, lamenting that many young innovators are being forced to take their businesses abroad.
She cited the experience of her son, who operates a gaming platform with a large global user base, saying the lack of a robust regulatory environment has discouraged international technology service providers from establishing operations in Nigeria.
According to her, billions of dollars in potential investments and job opportunities could be lost if the country fails to create the necessary legal framework for emerging digital industries.
Also supporting the bill, Senator Adams Oshiomhole said the need for regulation was self-evident and urged lawmakers to expedite its passage.
Senator Adetokunbo Abiru, however, advised that the proposed legislation should be harmonised with existing financial laws, including the Investments and Securities Act and the Banks and Other Financial Institutions Act (BOFIA), to ensure coherence in the regulation of the broader digital finance sector.
Summing up the debate, Barau said the legislation would help protect investors and other participants in the virtual asset ecosystem while ensuring that innovation contributes positively to national development.
He said a clear legal framework would provide safeguards against exploitation and promote confidence among investors and operators.
Following deliberations, the Senate referred the bill to its Committee on Capital Market for further legislative scrutiny, with a mandate to submit its report within four weeks.
If eventually passed into law, the legislation is expected to place Nigeria among African countries such as Kenya, South Africa and Ghana that have adopted formal regulatory frameworks for cryptocurrency and digital asset transactions, while empowering regulators to license operators and combat fraud, money laundering and terrorism financing.
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