Nigeria’s SEC Introduces Regulated Stablecoin Framework in Policy Shift

Nigeria’s Securities and Exchange Commission (SEC) has signaled a strategic shift in its approach to stablecoins, formalizing a regulatory framework to integrate these digital assets into the country’s financial system. Under the Investment and Securities Act 2025, stablecoin issuers must obtain licenses, maintain reserve backing, and adhere to anti-money laundering (AML) and know-your-customer (KYC) standards. The policy also introduces the Accelerated Regulatory Incubation Program (ARIP), a sandbox initiative designed to balance innovation with oversight. SEC Director-General Emomotimi Agama emphasized that the move aims to address currency volatility and position Lagos as a “stablecoin hub of the Global South,” with a goal of enabling cross-border trade via a Nigerian stablecoin within five years [1]. This framework marks a departure from earlier enforcement actions, such as legal challenges against exchanges like Binance, reflecting a broader pivot toward fostering domestic and international investment in a regulated environment [5].

Stablecoin operators under the new rules must align their operations with local economic conditions and implement transparency measures to mitigate fraud risks. The SEC’s designation of stablecoins as securities distinguishes its role from the Central Bank of Nigeria’s (CBN) focus on payment systems, creating a dual-layered regulatory ecosystem. Agama highlighted the growing demand for dollar-backed stablecoins in Nigeria’s economic climate, stressing the need for “African solutions” tailored to the country’s digital economy [5]. The ARIP program allows startups to pilot products under supervision, aligning Nigeria with global fintech trends while emphasizing localized oversight.

The policy shift is expected to attract domestic and international investors, reducing transaction costs and expanding financial inclusion. By embedding legal clarity and consumer safeguards, the SEC aims to integrate Nigeria into global trade networks. However, the success of the framework hinges on its ability to attract stablecoin operators while mitigating risks identified in past enforcement actions. The SEC’s dual role as regulator and innovation advocate underscores its goal of creating a secure, competitive ecosystem [1]. Nigeria’s regulatory pivot follows months of tensions with crypto exchanges and aligns with regional efforts across Africa to harness stablecoins for cross-border commerce. The framework’s emphasis on reserve requirements and ongoing oversight addresses concerns about stifling innovation, embedding flexibility within strict compliance protocols [5].

The regulatory clarity provided by the SEC contrasts with earlier ambiguity in the sector, which had deterred investment. By mandating compliance with investor protection standards and market integrity measures, the framework seeks to build trust in stablecoin markets. Agama framed the initiative as a cornerstone of “nation-building,” balancing regulatory rigor with support for innovation to address systemic challenges in the naira’s volatility [5]. The move aligns with global efforts to institutionalize cryptocurrency frameworks, though Nigeria’s approach emphasizes localized oversight. The SEC’s focus on African solutions underscores the need for regulations that reflect the continent’s unique economic and technological landscape. As stablecoin adoption grows, Nigeria’s regulatory shift could influence other African nations seeking to harness digital assets for financial resilience [5].

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/].