Central Bank of Nigeria and SEC collaborate on digital currency framework

The Central Bank of Nigeria Governor Olayemi Cardoso has announced that he will work with the Nigerian Securities and Exchange Commission (SEC) to build a sustainable digital currency framework.

Cooperation on a sustainable digital currency framework

Central Bank of Nigeria Governor Olayemi Cardoso has disclosed that the bank is working with the Nigerian Securities and Exchange Commission (SEC) to develop a sustainable framework for digital currencies. The revelation, made during the annual address of the Governor of the Central Bank of Nigeria (CBN) at the Lagos Business School, reflects a broader policy shift under the administration of President Bola Tinubu.

The tone has changed under Tinubu, with Cardoso’s comments signaling a new openness to digital assets, and regulators now seeking to “midwife” a framework that balances innovation and financial stability.

“We are working closely with all regulators to ensure a sustainable process regarding digital currencies,” Cardoso said.

Until early 2023, Nigerian authorities remained resolutely hostile to cryptocurrencies, with the CBN appearing to be at the forefront. Under the leadership of former Governor Godwin Emefiele, the CBN issued a directive effectively banning financial institutions from providing services to crypto-related businesses.

This aggressive stance sparked widespread criticism and suspicions that the CBN was overstepping regulatory boundaries and infringing on the jurisdiction of the SEC, which had previously indicated a more cautious approach to digital assets. The apparent turf war between the two regulators has created a fragmented policy environment, stifled innovation and left crypto entrepreneurs in a legal limbo.

Regulators approve of rapid adoption

However, since Tinubu took office on May 29, 2023, the CBN has retreated from its aggressive stance and ceded significant authority over crypto-related matters to the SEC.

Meanwhile, local news reports said the CBN governor admitted that Nigeria’s regulators were initially caught off guard by the rapid and widespread adoption of cryptocurrencies across the country. However, he noted that authorities have since recognized the urgency of gaining a deeper understanding of the digital asset landscape and introducing structured regulatory oversight to responsibly manage its growth.

Although details of the new framework have not yet been revealed, cooperation between regulators signals a shift towards a more integrated and forward-looking approach to digital currencies. This new regulatory alignment positions Nigeria as a new contender in the global debate on regulated digital innovation.