The Senate has advanced legislation aimed at establishing a comprehensive legal and regulatory framework for cryptocurrency and digital asset activities in Nigeria.

The Virtual Asset Service Providers Regulation Bill, 2026, passed second reading during plenary as lawmakers moved to introduce clearer oversight of the rapidly growing digital asset sector.

The proposed legislation seeks to regulate virtual assets, digital assets and Virtual Asset Service Providers (VASPs), while introducing licensing, disclosure and compliance requirements for cryptocurrency exchanges and related operators.

Lawmakers said the bill is designed to strengthen investor protection, reduce fraudulent activities and position Nigeria to benefit more effectively from opportunities within the global digital economy.

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The legislation, sponsored by Deputy Senate President Barau Jibrin, was presented by Senator Tahir Monguno, who led discussions on behalf of the sponsor.

During the debate, lawmakers observed that despite Nigeria’s status as one of Africa’s leading cryptocurrency markets, the country has yet to develop a comprehensive regulatory structure comparable to those adopted in several other jurisdictions.

They argued that the absence of clear rules has increased risks for investors and created opportunities for illicit financial activities within the digital asset ecosystem.

Contributors to the debate described virtual assets as an increasingly important component of global finance and stressed the need for regulatory certainty to encourage responsible innovation and investment.

According to lawmakers, effective regulation would provide safeguards for millions of Nigerians, particularly young entrepreneurs, traders and technology-driven businesses that rely on digital assets as part of their economic activities.

The Senate also noted that Nigeria’s high level of cryptocurrency adoption presents both significant opportunities and regulatory challenges. Lawmakers warned that leaving the sector largely unregulated could encourage informal transactions, undermine transparency and limit its potential contribution to national economic growth.

The proposed framework is expected to align Nigeria’s digital asset regulations with global standards promoted by international organisations focused on financial transparency, anti-money laundering compliance and market integrity.

If enacted, the legislation could provide a clearer operating environment for cryptocurrency businesses while strengthening confidence among investors and other participants in Nigeria’s expanding digital economy.