Nigeria's Senate has passed the Virtual Asset Service Providers Regulation Bill, 2026, for second reading, moving the country closer to a formal rulebook for crypto and digital asset activity. The proposal would set up a legal, regulatory, and supervisory framework for virtual assets, digital assets, and Virtual Asset Service Providers, with mandatory licensing for exchanges and other operators at the center of the plan.
The bill was sponsored by Deputy Senate President Senator Jibrin Barau and presented by Senator Tahir Monguno. During debate, lawmakers argued that Nigeria has waited too long to regulate a market in which it is already one of the world's heaviest users. They said the absence of a framework has pushed investment, jobs, and government revenue worth billions of naira outside formal oversight and away from the tax base.
Licensing, disclosure, and AML standards form the core of the bill
The measure would require crypto exchanges and digital asset businesses to obtain licenses and comply with transparency obligations across the sector. It also tightens anti-money-laundering requirements in line with standards associated with the Financial Action Task Force, or FATF, and the IMF frameworks referenced in the debate.
Senator Monguno told the Senate that Nigeria has fallen behind several African countries in regulating fast-growing digital finance activity. He listed three costs of inaction: the market shifts into a black economy, remains opaque and exposed to criminal use, and does not contribute to President Tinubu's $1 trillion economy target.
Lawmakers frame the proposal as regulation, not suppression
A clear theme ran through the session. Senators said the bill is meant to impose order, not shut the sector down. In his closing remarks, Senator Barau said the proposal does not seek to stifle innovation, but to create clear rules that support order, confidence, accountability, and consumer protection.
Several lawmakers described virtual assets as an unavoidable part of the changing global economy. The issue before the chamber was no longer whether the sector should be regulated. It was whether Nigeria could keep leaving participants without legal protection while fraud, money laundering, and terrorism financing risks remained harder to police.
A gaming example highlights the cost of regulatory gaps
Senator Natasha Akpoti-Uduaghan brought a concrete example into the debate. She said her son runs an online gaming platform with about 100,000 real-time players worldwide, yet he cannot operate it effectively from Nigeria. The backend servers needed for that business are hosted in South Africa rather than Nigeria because the required regulatory infrastructure is still missing at home.
She told lawmakers that billions of dollars are already flowing into virtual services globally, while young Nigerians are creating jobs and income through gaming and other digital platforms. Her remarks were used to show that the policy gap is affecting more than token trading, reaching into the wider digital services economy.
Committee review starts, with a report due in four weeks
Support for the bill was broad, but some senators asked for coordination with existing financial laws. Senator Adetokunbo Abiru backed the proposal while warning against regulating crypto in isolation. He said the framework should be aligned with the Investments and Securities Act and the Bank and Other Financial Institutions Act, or BOFIA, to avoid confusion across digital finance.
The bill has now been referred to the Senate Committee on Capital Market, which has four weeks to submit its report. If it becomes law, Nigeria would join Kenya, South Africa, and Ghana in setting up a formal crypto and virtual asset framework, with regulators empowered to license operators and act against fraud, money laundering, and terrorism financing in the sector.