Nigeria’s Securities and Exchange Commission (SEC) has admitted nine cryptocurrency firms into its regulatory incubation programme.
The programme represents part of the regulator’s ongoing efforts to provide structured oversight for digital asset service providers operating in Africa’s largest economy.
The SEC launched the incubation programme to allow crypto firms to operate under regulatory supervision while working toward full compliance with Nigeria’s digital asset framework. Firms admitted to the programme receive guidance on meeting regulatory requirements while continuing business operations.
The nine admitted firms were not named in the initial report. The SEC has not yet released an official statement detailing the companies or the specific terms of their participation.
Nigeria has taken a more structured approach to cryptocurrency regulation over the past two years. In May 2022, the SEC issued operational guidelines for digital asset offerings and exchanges, establishing licensing requirements and investor protection measures.
The guidelines categorise digital assets and set capital requirements for exchanges and custodians. Virtual asset service providers must register with the SEC and comply with anti-money laundering and know-your-customer requirements.
The incubation programme allows firms that do not yet meet all licensing criteria to continue operating while working toward compliance. This regulatory sandbox approach has been adopted by several African countries seeking to balance innovation with investor protection.
Nigeria has one of the highest rates of cryptocurrency adoption globally. Despite a central bank directive in 2021 restricting banks from facilitating crypto transactions, peer-to-peer trading volumes have remained high.
In December 2023, the SEC approved two cryptocurrency exchanges, Busha Digital and Quidax, to operate as digital asset exchanges. These approvals marked the first fully licensed crypto platforms in Nigeria under the new regulatory framework.
The admission of nine additional firms into the incubation programme suggests the regulator is expanding its oversight capacity and working with more companies to bring them into formal compliance.
Nigeria’s approach contrasts with some regional neighbours. Kenya’s Capital Markets Authority has taken a cautious stance, while South Africa has implemented comprehensive crypto asset regulations under its Financial Sector Conduct Authority.
What happens next
Firms in the incubation programme will be expected to demonstrate progress toward meeting full licensing requirements. The SEC has not publicly disclosed timelines for graduation from the incubation phase to full licensing.
The regulator’s next steps may include publishing names of admitted firms and detailed compliance expectations. Industry observers expect the SEC to continue expanding the programme as more crypto businesses seek regulatory clarity.