Nigeria’s push to formalise regulation of digital asset activity is taking a more structured shape, as regulators move beyond policy signals into active supervision of market participants.
The Central Bank of Nigeria has commenced a supervision pilot programme targeting Virtual Asset Service Providers (VASPs), marking a new phase in its approach to monitoring crypto-related activities within the financial system.
The initiative is built around anti-money laundering, counter-terrorism financing, and counter-proliferation financing (AML/CFT/CPF) standards, and is designed to give the central bank a clearer view into how crypto firms operate. Participating VASPs are being assessed within a controlled framework that allows regulators to study their business models, risk exposure, and compliance systems in real time.
Firms selected for the pilot include a mix of fintech and crypto-focused players such as Flutterwave, Paystack, and KuCoin, alongside others operating in Nigeria’s evolving digital asset ecosystem.
Under the programme, participants are required to submit monthly compliance reports, engage directly with regulators, and undergo reviews covering governance structures, transaction monitoring, customer onboarding, and sanctions screening. There is also a strong emphasis on readiness for the Financial Action Task Force (FATF) “Travel Rule,” which requires the sharing of transaction data between institutions to curb illicit flows.
The pilot does not grant regulatory approval or licensing status to participating firms. Instead, it serves as a supervisory exercise aimed at shaping future regulatory frameworks while strengthening internal compliance standards across the sector.
This development builds on earlier policy change. In 2021, the central bank restricted financial institutions from facilitating crypto transactions, a stance that softened in 2023 when guidelines allowed banks to work with licensed VASPs under defined conditions. The current pilot reflects a transition from restriction to structured engagement.
The action also aligns with broader regulatory trends in Nigeria, where authorities are increasingly adopting data-driven and technology-enabled supervision to keep pace with fintech innovation and cross-border financial activity.
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