Nigeria is advancing its regulation of cryptocurrency by implementing a tax framework for digital asset transactions and planning to issue full licenses to crypto exchanges in 2025. This initiative aims to boost government revenue and bring cryptocurrency trading under formal oversight. The Securities and Exchange Commission (SEC) is developing regulations to tax eligible transactions on regulated exchanges, with a bill outlining the tax framework expected to be approved in the first quarter of 2025.

The move to tax crypto transactions comes as Nigeria grapples with high inflation and a weakened naira, prompting many Nigerians to use cryptocurrencies as a hedge. President Bola Tinubu's administration is seeking to increase government revenue and reduce the budget deficit through these fiscal reforms. Some exchanges, like KuCoin, have already started implementing tax measures, such as a 7.5% value-added tax (VAT) on trading fees for Nigerian users.

In addition to taxation, the SEC plans to expand crypto licensing, issuing permits for centralized exchanges to allow for monitoring and taxation of transactions. The SEC believes that centralized exchanges will provide greater protection and comfort for investors, leading to a gradual shift towards these platforms. This initiative follows the issuance of the first crypto exchange license in August 2024 and plans to take enforcement actions against unregulated exchanges. As of September 2024, 50 cryptocurrency exchanges had applied for operational licenses in Nigeria. These regulatory developments occur amid ongoing tensions between Nigerian authorities and Binance.