Nigeria Creates Virtual Asset Regulatory Council to Oversee Booming Crypto Market
President Tinubu establishes new coordinating body as Africa's largest economy moves to formalize oversight of its rapidly expanding digital asset sector, with the Central Bank designated as lead regulator.
Syntheda's AI technology correspondent covering Africa's digital transformation across 54 countries. Specializes in fintech innovation, startup ecosystems, and digital infrastructure policy from Lagos to Nairobi to Cape Town. Writes in a conversational explainer style that makes complex technology accessible.
Nigeria just made its most significant regulatory move yet in the cryptocurrency space. President Bola Ahmed Tinubu has established the Virtual Asset Regulatory Council (VARC), a new coordinating body designed to bring order to the country's sprawling digital asset market. The Central Bank of Nigeria has been tapped to lead the effort.
The timing matters. Nigeria consistently ranks among the world's top countries for cryptocurrency adoption, with peer-to-peer trading volumes regularly hitting hundreds of millions of dollars monthly even after the CBN's controversial 2021 banking restrictions on crypto transactions. Young Nigerians have embraced digital assets as a hedge against naira devaluation and as a remittance channel that bypasses expensive traditional banking rails.
According to The Nation Newspaper, the VARC represents "a decisive move to strengthen oversight of Nigeria's fast-growing digital asset market." The council structure suggests the government recognizes that crypto regulation can't sit with just one agency. Virtual assets touch everything from banking and securities to telecommunications and law enforcement, which explains why a coordinating council makes sense.
The Central Bank's designation as lead regulator clarifies what's been a messy jurisdictional question. Nigeria's Securities and Exchange Commission has also claimed regulatory authority over digital assets, creating confusion for startups and investors trying to figure out which agency to approach for licensing. The VARC should theoretically resolve these turf battles by establishing clear lines of responsibility across government agencies.
What remains unclear is how this new framework will interact with existing regulations. The SEC released comprehensive rules for digital asset offerings and cryptocurrency exchanges back in 2022, requiring registration and imposing capital requirements. Some exchanges have secured SEC approval, while others operate in regulatory gray zones. Will VARC harmonize these rules or create an entirely new regime?
For Nigeria's crypto entrepreneurs, regulatory clarity can't come soon enough. The country has produced notable blockchain startups like Busha, Quidax, and Yellow Card, which collectively serve millions of users across Africa. But many have registered offshore in places like Estonia or the Cayman Islands specifically because Nigeria's regulatory environment has been unpredictable. A functioning VARC with clear rules could encourage these companies to bring operations and tax revenue back home.
The broader African context matters here too. Kenya, South Africa, and Ghana have all been working on their own cryptocurrency frameworks, with varying approaches. Kenya's Capital Markets Authority has taken a cautiously progressive stance, while South Africa has proposed bringing crypto assets under existing financial regulations. Nigeria's VARC model, with its multi-agency coordination structure, could become a template for other African governments wrestling with the same challenges.
The Central Bank's track record on crypto hasn't exactly inspired confidence among users. Its 2021 directive ordering banks to close accounts linked to cryptocurrency transactions drove trading underground and sparked a backlash from young Nigerians who saw it as out of touch with economic reality. The CBN later softened its stance, acknowledging that an outright ban was unenforceable. This new coordinating role suggests the bank has learned that engagement beats prohibition.
For investors and users, the key question is what specific regulations will follow. Will Nigeria pursue a licensing regime similar to South Africa's, where crypto businesses must register as financial service providers? Or something closer to Kenya's approach, which treats digital assets as securities requiring exchange approval? The devil will be in the details, and those details haven't been published yet.
What's certain is that Nigeria can't afford to ignore cryptocurrency any longer. With inflation running above 30 percent and the naira under persistent pressure, millions of Nigerians have already voted with their wallets by moving savings into stablecoins and Bitcoin. The VARC represents the government's acknowledgment that regulation, not restriction, is the only viable path forward for Africa's largest economy in the digital asset age.