Nigeria's SEC Formalizes Stablecoin Regulation to Address Currency Volatility and Financial Inclusion

Nigeria’s Securities and Exchange Commission (SEC) has formalized a regulatory framework to integrate stablecoin businesses into the country’s financial system, marking a strategic pivot from earlier enforcement actions. Under the Investment and Securities Act 2025, stablecoin issuers must now secure licenses, maintain reserve-backed tokens, and adhere to anti-money laundering (AML) and know-your-customer (KYC) protocols. The SEC introduced the Accelerated Regulatory Incubation Program (ARIP), a regulatory sandbox, to onboard compliant firms while ensuring market stability. Director-General Emomotimi Agama emphasized that this shift aims to address currency volatility, empower freelancers and traders, and position Lagos as a “stablecoin hub of the Global South” [5].

The policy aligns with Nigeria’s broader economic goals, including financial inclusion and reduced transaction costs, by creating a legal environment that attracts both domestic and international stablecoin operators. Agama highlighted the necessity of localized “African solutions” tailored to the country’s digital economy, particularly the rising demand for dollar-backed stablecoins amid the naira’s instability. The framework mandates that only firms meeting compliance standards transition to full-scale operations, prioritizing investor protections and market integrity [5].

This regulatory overhaul follows months of enforcement actions, including a $81.5 billion lawsuit against Binance for alleged currency devaluation and tax evasion. By classifying stablecoins as regulated securities, the SEC aims to provide legal clarity and consumer safeguards, distinguishing its approach from the Central Bank of Nigeria’s narrower focus on payment systems. The success of the framework hinges on balancing innovation with risk mitigation, particularly in preventing fraud linked to volatility. Agama framed the initiative as a cornerstone of “nation-building,” underscoring Nigeria’s dual role as a regulator and innovation advocate [1].

The policy shift aligns with global trends, such as the U.S. GENIUS Act, which introduces federal licensing for stablecoin issuers. However, Nigeria’s approach is uniquely tailored to local challenges, including limited access to traditional financial services and currency fluctuations. The ARIP sandbox reflects a growing global trend of embedding innovation within oversight, similar to frameworks in the European Union and Singapore [7]. By embedding legal certainty, Nigeria aims to model responsible digital asset integration for the continent, leveraging stablecoins to enhance cross-border commerce and financial resilience.

Source: [1] [Nigeria Opens Doors to Regulated Stablecoins in Policy Shift] [https://www.mitrade.com/au/insights/news/live-news/article-3-987155-20250725] [5] [Nigeria open to stablecoins, says SEC] [https://punchng.com/nigeria-open-to-stablecoins-says-sec/] [7] [GENIUS Act Signed: What's Next For Digital Assets?] [https://www.bitgo.com/resources/blog/genius-act-signed/]