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Partner with a SEC-licensed VASP (Quidax, Bybit, Binance) for instant crypto-to-Naira conversion with 1.5-3.5% transaction fees. This avoids the ₦500m minimum capital requirement.
Explore VASP OptionsOver 60 million Nigerians use cryptocurrency, but if you're a business owner trying to accept it as payment, you're navigating a maze of regulations. Nigeria's cryptocurrency regulation has evolved dramatically since 2025, creating new opportunities and strict barriers for businesses. Here's what you need to know to stay compliant and avoid legal risks.
The Legal Shift: From Ban to Regulation
Before 2025, Nigeria's crypto scene was chaotic. In February 2021, the Central Bank of Nigeria (CBN) banned banks from servicing crypto exchanges. This pushed businesses to risky peer-to-peer (P2P) platforms and created major hurdles. Everything changed on March 29, 2025, when President Bola Ahmed Tinubu signed the Investments and Securities Act (ISA) 2025 into law. This legislation officially recognized digital assets as securities under the Securities and Exchange Commission (SEC)'s jurisdiction. But crucially, it didn't make cryptocurrency legal tender. Only the Naira holds that status under the Central Bank of Nigeria Act 2007. This distinction creates a complex environment where businesses can't simply accept Bitcoin or Ethereum as direct payment for goods and services.
Why Crypto Isn't Legal Tender in Nigeria
The ISA 2025 makes a clear separation: cryptocurrency is a security or investment asset, not currency. This means you can't use it to pay for your groceries or utility bills like you would with Naira. The CBN's Circular BSD/DIR/GEN/LAB/15/001 from December 2023 lifted the banking ban but only for licensed entities. Banks can now serve Virtual Asset Service Providers (VASPs), but they're strictly prohibited from handling direct crypto payments between merchants and customers. The SEC's April 15, 2025 guidance document states: 'Digital assets are recognized as securities and investment instruments, not as currency substitutes for everyday commercial transactions.' This is why businesses face serious legal risks if they try to accept crypto directly without proper licensing.
What Businesses Need to Do to Accept Crypto
To legally accept cryptocurrency, you must register as a Virtual Asset Service Provider (VASP), Digital Asset Operator (DOP), or Digital Asset Exchange (DAE) with the SEC. This process isn't simple. The SEC requires a minimum capital of ₦500 million (about $350,000 USD), strict Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) procedures, and cybersecurity measures meeting ISO/IEC 27001 standards. The application takes an average of 145 days to process, with a 63% initial rejection rate. Most rejections happen due to inadequate AML systems or insufficient capital. For example, a Lagos-based e-commerce store owner named 'LagosTrader87' shared on Reddit: 'I tried to accept Bitcoin directly before ISA 2025. Got a warning letter from the SEC in January 2025 and had to shut it down. Now I use BitFinance to convert crypto to Naira immediately, but the 3.5% fee plus compliance costs eat into my margins.'
Real-World Challenges for Merchants
Despite Nigeria ranking second globally in crypto adoption with over $1.2 billion in monthly P2P transactions, merchant acceptance has plummeted. A Breet.io survey in August 2025 found only 11% of merchants continued accepting crypto after ISA 2025. The main barriers? SEC registration complexity (89% of businesses cited this), high compliance costs (76%), and banking restrictions (68%). Even large companies struggle. A Jumia vendor complained on X (Twitter) in September 2025: 'Had to turn away international customers who wanted to pay in USDT. SEC rules say I must convert to Naira first through their approved channels, adding unnecessary steps and fees.' Meanwhile, licensed VASPs like Quidax and Bybit Nigeria saw 215% and 187% merchant growth respectively in Q2-Q3 2025, but these platforms require businesses to partner with them rather than accept crypto directly.
Alternatives for Business Owners
Most Nigerian businesses bypass direct crypto acceptance by partnering with SEC-licensed VASPs. These platforms handle the crypto-to-Naira conversion, so merchants receive Naira instead of cryptocurrency. This approach avoids the need for full VASP registration but comes with fees of 1.5-3.5% per transaction. For example, businesses using Quidax's payment gateway automatically convert crypto payments to Naira within seconds. Another option is the Central Bank of Nigeria's eNaira, which launched its commercial phase on October 1, 2025. With over 1.2 million users in its first week, eNaira offers a government-backed digital currency for everyday transactions without the regulatory hurdles of cryptocurrency. However, eNaira isn't a crypto solution-it's a separate central bank digital currency (CBDC) designed to complement the Naira, not replace it.
What's Next for Nigerian Crypto Regulations
The SEC announced a six-month review of the merchant acceptance framework on September 18, 2025. Director General Emomotimi Agama acknowledged the need to 'balance innovation with financial stability' in a Bloomberg statement. Proposed changes include creating a separate 'Digital Payment Vehicle' category for merchant transactions with lower capital requirements (potentially ₦50 million instead of ₦500 million). Industry analysts like Standard Chartered's Africa Research Head, Razia Khan, suggest Nigeria's framework is strong for investment but needs adaptation for commercial use. 'Nigeria's crypto regulatory framework is robust for investment purposes but must adapt to capture the full economic potential of blockchain technology in commercial transactions,' Khan said in her September 25, 2025 report. For now, businesses must navigate the current SEC rules carefully to avoid legal issues while hoping for smoother pathways in the near future.
Can I accept Bitcoin directly as payment for my business in Nigeria?
No. Under Nigeria's Investments and Securities Act (ISA) 2025, cryptocurrency is not legal tender. Businesses cannot accept Bitcoin or other cryptocurrencies directly as payment for goods or services unless they are registered as a Virtual Asset Service Provider (VASP), Digital Asset Operator (DOP), or Digital Asset Exchange (DAE) with the Securities and Exchange Commission (SEC). Even then, most licensed entities convert crypto to Naira immediately rather than holding it as payment. Attempting to accept crypto without proper licensing risks SEC penalties, including fines and business shutdowns.
What happens if I accept crypto without a VASP license?
The SEC can impose severe penalties for unlicensed crypto acceptance. This includes fines up to ₦100 million ($70,000 USD), business suspension, or criminal charges. In January 2025, the SEC issued warning letters to over 200 unlicensed businesses, shutting down several small e-commerce stores that accepted Bitcoin directly. Even if you convert crypto to Naira immediately, the SEC considers this a regulated activity requiring VASP registration.
How much does VASP registration cost?
The SEC requires a minimum capital of ₦500 million ($350,000 USD) for VASP registration. Setup costs typically range from ₦85 million to ₦200 million ($60,000-$140,000 USD) for technical infrastructure like cold storage systems and AML monitoring tools. Ongoing compliance costs average 2.8% of transaction volume annually. Small businesses often find this prohibitive, which is why many partner with existing VASPs like Quidax instead of applying directly.
Can I use eNaira instead of cryptocurrency?
Yes. The Central Bank of Nigeria's eNaira is a government-backed digital currency designed for everyday transactions. Unlike cryptocurrency, eNaira is legal tender and fully compliant with Nigerian financial regulations. Businesses can accept eNaira payments without special licenses, and transactions settle instantly in Naira equivalents. Since its commercial launch on October 1, 2025, over 1.2 million users have adopted eNaira, making it a safer alternative for businesses wanting digital payment options without crypto's regulatory complexities.
Which VASPs are SEC-approved for business payments?
As of September 30, 2025, there are 47 SEC-licensed VASPs in Nigeria. Top providers include Quidax (28% market share), Bybit Nigeria (24%), and Binance Nigeria (19%). These platforms offer merchant services where they convert crypto payments to Naira instantly, allowing businesses to receive Naira while customers pay in crypto. Quidax's merchant portal, for example, supports automatic conversion with 1.5-2.5% fees, while Bybit Nigeria charges 2.0-3.5% depending on transaction volume. All licensed VASPs must comply with strict AML/CFT rules and real-time reporting to the Nigerian Financial Intelligence Unit (NFIU).
It feels like the regulators are pulling strings from the shadows, shaping the market while most merchants just watch. The law says crypto is a security, yet everyday people treat it like cash. This duality is a mirror of a hidden agenda, a way to keep power centralized. If you think the SEC is only protecting investors, maybe you missed the bigger picture of control. In the end, we are all pieces on a board we cannot see.
One could argue the state’s sudden embrace of crypto regulation is just a façade, a polite invitation to a surveillance banquet. While the headlines celebrate investment opportunities, the fine print whispers about data collection and identity tracking. If we accept the official story, we may be surrendering more than we realize.