Nigeria has taken a decisive step in formalising its approach to digital asset oversight. The newly approved Virtual Asset Regulatory Council (VARC) is tasked with coordinating how cryptocurrencies, stablecoins, and other virtual assets are regulated across the country.
The move comes as Nigeria’s digital asset market continues to expand rapidly. Between July 2024 and June 2025, formal virtual asset transactions were estimated at $92.1 billion, excluding peer-to-peer and over-the-counter activity. At this scale, fragmented regulation was no longer sustainable.
What Is VARC and How Will It Work?
VARC is not a standalone regulator. Instead, it serves as a coordination layer that aligns existing agencies under a unified supervisory framework.
Under this structure, the Central Bank of Nigeria (CBN) and the Nigeria Revenue Service (NRS) act as joint supervisors for non-security virtual assets, operating within the broader Virtual Asset Regulatory Authority (VARA) framework.
Meanwhile, the Securities and Exchange Commission (SEC) retains authority over virtual assets classified as securities. This separation reduces regulatory ambiguity for operators and investors.
- Virtual Asset Regulatory Council (VARC): Strategic coordination body co-chaired by the CBN Governor and the Executive Chairman of the NRS.
- Virtual Asset Regulatory Office (VARO): Handles day-to-day coordination and supervision of non-security virtual asset activities.
- Agency-Based Regulatory Teams: Embedded within existing institutions to avoid overlap and siloed regulation.
Also Read: Nigeria’s 2B Naira Crypto Rule For Exchange Licensing
What This Means for Crypto and Virtual Asset Operators
Under Nigeria’s evolving virtual asset regulation framework, all virtual asset service providers local or offshore must:
- Register with relevant authorities
- Comply with Know Your Customer (KYC) and AML requirements
- Maintain strong client asset protection standards
- Meet cybersecurity benchmarks
Compliant operators gain formal recognition, improved access to banking services, and eligibility for regulated partnerships.
A Virtual Asset Sandbox has also been introduced, allowing startups to operate under supervision while licensing requirements are phased in.
No New Legislation For Now
Rather than introducing new laws, the federal government has empowered existing regulators to act within their current mandates. The framework draws inspiration from models such as Dubai’s virtual asset regime, but Nigeria’s approach focuses on coordinated oversight rather than a single independent regulator.
Officials describe this as Africa’s first operational, multi-agency regulatory structure dedicated to virtual assets.
Strategic Takeaway for Nigeria’s Digital Asset Economy
Nigeria virtual asset regulation is shifting from reactive enforcement to structured, proactive oversight. With one of Africa’s highest crypto adoption rates, the country is signalling that coordinated regulation, not outright restriction, is the path to a sustainable digital asset economy.
The success of VARC will depend on execution. Effective coordination could accelerate innovation and boost investor confidence. Poor implementation risks slowing an ecosystem built on speed and flexibility.
Either way, the message is clear: Nigeria’s digital asset market is maturing, and adaptability will define the winners.
