NIGERIA Law and Practice Contributed by: Omoruyi Edoigiawerie, Adebomi Adekeye and Habeeb Eyinade, EandC Legal
Legitimacy of transfer For a transfer to be legally robust for institutional use, it must occur through SEC-licensed platforms. Under the NTAA 2025, transfers must be linked to the par- ticipants’ Tax Identification Numbers (TIN), ensuring that the transaction is recognised within the national fiscal framework. Digital Assets as Collateral The ISA 2025 has paved the way for digital assets to be used in formal collateral arrangements, subject to strict ring-fencing rules. • Only SEC-licensed digital asset custodians, who must now meet a NGN2 billion minimum capital requirement, can legally hold digital collateral. This high barrier to entry ensures institutional-grade security for lenders. • While legally eligible, the primary challenge remains market volatility. The authors advise clients to inte- grate dynamic maintenance clauses and automat- ed margin-call protocols into their security deeds to ensure that collateral levels remain enforceable during market fluctuations. 1.2.2 Access to Banking The relationship between blockchain firms and the Nigerian banking sector has transitioned from total prohibition to a high-compliance partnership model. While the 2021 restriction has been lifted, access is strictly governed by the CBN Guidelines on the Oper- ations of Bank Accounts for VASPs (2023/2024) and the ISA 2025. Restrictions on Banking Partners Firms providing crypto-asset services face structural gating in their choice of banking and payment part- ners. • SEC licensing prerequisite: banks are strictly prohibited from opening accounts for any block- chain firm that does not hold a valid licence or an Approval-in-Principle (AIP) from the SEC. • Designated account structure: VASPs are restricted to designated accounts, specialised vehicles that must be approved by the bank’s senior manage- ment (Assistant General Manager level and above).
These accounts are ring-fenced and cannot be used for the firm’s general corporate operations. • Cash restrictions: a critical restriction is the abso- lute prohibition on cash withdrawals from these designated accounts. All transactions must be electronic, ensuring a digital audit trail. Issues in Obtaining Services Even with the new legal framework, institutional fric- tion remains a primary challenge for the industry. • It is important to note that Nigerian banks do not directly trade or hold crypto-assets on their own balance sheets. They function solely as fiat-on- ramp facilitators for licensed entities. • Under the March 2026 CBN Pilot Supervision Program, banks are mandated to place an imme- diate Post-No-Debit order on any VASP account where know-your-customer (KYC) documentation or the SEC licence status is found to be invalid or expired. • The CBN mandates a T+3 settlement cycle for VASP transactions, which can create liquidity bottlenecks for firms accustomed to the real-time nature of blockchain settlements. The banking problem in Nigeria has shifted from a legal hurdle to an operational one. While it is now legal to obtain a bank account, the high administrative bur- den means that many Tier 1 banks only partner with the most sophisticated, well-capitalised VASPs. The authors find that firms meeting the NGN2 billion SEC capital requirement find it significantly easier to navi- gate bank onboarding than smaller fintech start-ups. 1.2.3 ESG/Sustainable Finance As of 2026, ESG requirements in Nigeria have tran- sitioned from “encouraged best practices” to man- datory disclosure frameworks for regulated financial entities, including digital asset service providers. The Financial Reporting Council of Nigeria The Financial Reporting Council (FRC) of Nigeria recently launched the National Digital Platform for Sustainability Regulatory Reporting (2026). This plat- form standardises sustainability disclosures across all public interest entities.
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