Nigeria Becomes First African Nation to Regulate Stablecoins via 2025 ISA

Nigeria has enacted a comprehensive regulatory framework for stablecoins under the Investment and Securities Act 2025, marking a strategic shift toward integrating digital assets into its financial system while prioritizing market stability and consumer protection. The Securities and Exchange Commission (SEC), led by Director-General Emomotimi Agama, announced the move at the Nigeria Stablecoin Summit on July 11, 2025, declaring the country “open for stablecoin business” under conditions that align with global standards but reflect local economic realities. The framework mandates compliance with anti-money laundering (AML) and know-your-customer (KYC) protocols, positioning Nigeria as one of the first African nations to codify stablecoin regulations [1].

The new legal structure, codified under ISA 2025, clarifies the SEC’s authority over stablecoin issuance while maintaining the Central Bank’s jurisdiction over payment systems, a division designed to prevent regulatory overlap and ensure cohesive oversight. Agama emphasized the need for “African solutions tailored to local market conditions,” highlighting Nigeria’s youthful, tech-savvy population and the growing reliance on stablecoins to mitigate naira volatility. Freelancers, traders, and businesses are increasingly adopting dollar-backed stablecoins to hedge against currency fluctuations, a trend the SEC aims to channel through structured innovation [1].

To foster growth without stifling creativity, the SEC introduced a regulatory sandbox to onboard stablecoin startups, ensuring compliance with risk management principles. Agama confirmed that several firms focused on stablecoin applications are already participating in the sandbox, which serves as a controlled environment for testing innovations. This approach aligns with Nigeria’s ambition to become a regional hub for digital asset development, with Agama envisioning a Nigerian stablecoin facilitating cross-border trade across Africa within five years [1].

The framework’s emphasis on balance—between innovation and oversight—has drawn praise from stakeholders. By creating a clear legal pathway for stablecoin firms, Nigeria aims to attract foreign and domestic investment while expanding financial inclusion. The SEC’s sandbox model mitigates risks associated with unregulated experimentation, as Agama noted that “regulation has not stifled innovation.” Analysts predict the move will boost market liquidity, stablecoin adoption, and cross-border remittance flows, particularly in regions with underdeveloped banking infrastructure [2].

Nigeria’s approach mirrors regulatory frameworks in the EU and Singapore, but with a focus on local priorities such as demographic realities and development goals. The SEC’s proactive stance reflects a broader economic strategy to leverage digital finance for trade and remittance growth, capitalizing on the country’s young, decentralized workforce. Agama’s vision includes transforming Lagos into a global capital for stablecoin development, leveraging the city’s existing fintech ecosystem [3].

The regulatory clarity and strategic alignment with Nigeria’s economic needs underscore the country’s readiness to embrace digital assets as a tool for development. By fostering a stable yet dynamic environment for stablecoin innovation, Nigeria positions itself as a potential benchmark for African nations seeking to balance technological advancement with consumer protection.

Source:

[1] [Nigeria open to stablecoins, says SEC] [https://punchng.com/nigeria-open-to-stablecoins-says-sec/]

[2] [Nigeria Stablecoin Summit: Stakeholders champion real-...] [https://technext24.com/2025/07/24/nigeria-stablecoin-summit-real-adoption/]

[3] [Nigeria Welcomes Stablecoin Firms, One Year After ...] [https://financefeeds.com/nigeria-welcomes-stablecoin-firms/]