Nigeria Establishes Stablecoin Regulatory Framework with AML Rules and Sandbox to Drive Innovation and Market Trust

Nigeria has established a formal regulatory framework for stablecoins under the revised Investment and Securities Act 2025, enacted by the Securities and Exchange Commission (SEC). The framework mandates strict compliance with anti-money laundering (AML) and know-your-customer (KYC) protocols, signaling a shift from earlier stringent measures like the 2024 legal action against Binance. By introducing a regulatory sandbox, Nigeria aims to onboard stablecoin operators while protecting market integrity and empowering citizens. Emomotimi Agama, Nigeria’s SEC Director-General, emphasized that the framework aligns with “local realities,” ensuring foreign and domestic entities adhere to conditions tailored to the country’s economic context [4].

The regulatory regime includes the Approved Regulatory Innovation Platform (ARIP), designed to streamline approvals for compliant stablecoin projects. The SEC has clarified jurisdictional boundaries, with the Central Bank of Nigeria overseeing payment systems and the SEC governing digital assets. This distinction aims to prevent regulatory overlaps and enhance clarity for market participants [5]. The framework also addresses Nigeria’s high demand for stablecoins, driven by naira volatility, and positions Lagos as a potential digital asset hub by attracting foreign capital and fostering local innovation [1].

Stakeholders have welcomed the move, citing its potential to boost fintech investments and cross-border trade. Analysts note that the regulations could stabilize the market, increase investor confidence, and expand financial inclusion through remittances and B2B transactions. However, challenges remain, such as harmonizing the framework with broader fintech regulations and addressing capital controls. The timing of the framework’s implementation coincides with global trends, including the U.S. GENIUS Act, though Nigeria’s approach is distinct in its focus on localized conditions [7].

The SEC’s stance aligns with its mandate to modernize financial markets while mitigating risks from unregulated digital assets. Nigeria’s status as a leading crypto market in Africa—backed by high mobile money penetration and a tech-savvy population—adds urgency to its regulatory pivot. The success of the framework will depend on effective enforcement without stifling innovation, a balance the SEC has yet to test [9].

Sources indicate that the new regulations reflect Nigeria’s openness to stablecoin business “on terms that protect our markets and empower Nigerians.” This strategic shift is expected to attract global players and reinforce Nigeria’s position in the digital economy, provided the SEC adapts to evolving market dynamics [1].

Source:

[1] [title1] [https://punchng.com/nigeria-open-to-stablecoins-says-sec/]

[2] [title2] [https://www.mitrade.com/au/insights/news/live-news/article-3-988069-20250725]

[3] [title3] [https://www.mitrade.com/au/insights/news/live-news/article-3-987155-20250725]

[4] [title4] [https://www.cryptoninjas.net/news/nigeria-sends-strong-signal-to-crypto-were-open-for-stablecoin-business-on-our-terms/]

[5] [title5] [https://technext24.com/2025/07/24/nigeria-stablecoin-summit-real-adoption/]

[6] [title6] [https://cryptocoin.news/news/nigeria-welcomes-stablecoin-innovation-with-new-sec-regulations-134024/]

[7] [title7] [https://medium.com/@FromLagosto/how-the-u-s-genius-acts-stablecoin-rules-could-transform-crypto-regulation-in-nigeria-and-africa-965834219a22]

[8] [title8] [https://ground.news/article/nigeria-stablecoin-summit-stakeholders-champion-real-world-use-cases-for-explosive-adoption]

[9] [title9] [https://financefeeds.com/nigeria-welcomes-stablecoin-firms/]