Is Crypto Legal in Nigeria? Understand Crypto Regulations and Insights

Cryptocurrency is legal in Nigeria, although it is not recognized as legal tender by the Central Bank. Despite restrictions on banks handling crypto transactions, peer-to-peer (P2P) trading remains popular, with growing adoption driven by economic factors like inflation and currency instability.
Cryptocurrency in Nigeria operates within a unique legal framework. While the Central Bank of Nigeria (CBN) does not recognize digital currencies as legal tender, it has not imposed an outright ban on their use. In February 2021, the CBN prohibited commercial banks from processing cryptocurrency-related transactions, which led to a surge in peer-to-peer (P2P) trading as an alternative.

Despite the restrictions, crypto exchanges like Paxful and KuCoin continue to facilitate crypto transactions in the country, which ranks second in the Global Crypto Adoption Index for 2024 by Chainalysis. The adoption of cryptocurrencies in Nigeria is largely driven by a young, tech-savvy population that views digital assets as a hedge against the devaluation of the naira and high inflation.

Crypto exchanges operating in Nigeria must comply with regulations set by the Securities and Exchange Commission (SEC), including a minimum capital requirement of 500 million naira and various risk management protocols. These legal frameworks are designed to regulate the market without completely stifling its growth.

Nigeria remains a key player in global cryptocurrency adoption, with the market projected to expand further. As regulators seek to balance market growth with financial system protection, the future looks promising for crypto in Nigeria. Statista projects the cryptocurrency adoption rate to reach 11.02% by 2025.

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