This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
5.7%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
7
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
80
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
12 163 800
Total amount of crypto users out of the country's total population based on public data.
Taxation points
25
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
171.3
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
No info
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
High danger
The overall level of security in a given country based on open data.
Crypto Salaries
No info
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
Difficult
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
None
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
FATF grey list
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Wallet/Custody
This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.
ICO/STO
This indicator describes legal procedures for token sales and security token issuance. This country has a clear regulation framework and licensing procedures for entities that provide this activity.
Along with the Republic of South Africa, Nigeria is the largest economy in Africa. The country has 230 million inhabitants, 12 million of whom use crypto. This fact makes Nigeria one of the largest crypto markets, comparable to Argentina and even the United States, regarding the number of crypto users.
The Central Bank of Nigeria was firmly against legalizing cryptocurrencies and banned crypto payments for a long time. Moreover, Nigeria and China were the first major economies to issue their CBDC, E-naira publicly.
Security level
According to our rating, Nigeria has a high danger security level. The jurisdiction has 34.2 points (from 100) for safety level in Numbeo crime rating (1). The homicide level (2) is 21.7 per 100,000 inhabitants a year.
Crypto Payments
Direct crypto payments still need legal status. For a long time, the Central Bank of Nigeria banned them.
Crypto Salaries
There is no regulation for salaries in crypto.
Legal
Nigeria has a long history of crypto regulation. The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) are the two central regulators in the country. In February 2021, the CBN tried to impose a crypto ban. It prohibited (3) local banks from operating with crypto entities.
The first time the local SEC published (4) its approach to crypto regulation was in February 2021, and it suggested a different approach to crypto regulation, then banned it. New regulations were confirmed in May 2022, and the SEC has legalized (5) crypto exchanges and wallets. The SEC defines (6) all crypto assets as “digital assets.”
Details from the Law Review
The SEC(7) approved the New Rules on Issuance, Offering Platforms, and Custody of Digital Assets (the Digital Asset Rules) to regulate digital assets and virtual asset service providers. The Digital Asset Rules, although without a commencement date, are wide in provision and provide rules for the issuance of digital assets as securities and the registration of the following:
Based on Cointelegraph (8), getting a VASP license from the SEC requires “paid-up capital of 500 million nairas” and a current fidelity bond covering at least 25% of the company’s minimum paid-up capital.
According to Forbes (9), SEC regulations define token issuance and requirements for exchange and custodian platforms.
operating digital assets offering platform
requirements for digital asset custodians
Also, the local government is planning to create (10) virtual crypto zones in particular digital cities - this is confirmed by the Nigerian Export Processing Zones Authority (NEPZA)
Crypto companies operating in the country include Yellow Card, BitPesa (broker), BreetApp, and Binance Nigeria. Foreign exchanges operate in Nigeria without licenses but have issues with their banking accounts.
At the end of 2022, there were problems (11) with crypto exchange users' bank accounts due to the Central Bank's position.
However, according to Cryptonomist (12), currently, for local users, It's possible to convert crypto to fiat from Metamask thanks to their partnership with Consensus and Moon Pay. Local Nigerian banks also support fiat deposits to Metamask.
There is a VASP registry in Nigeria, based on which seven organizations in the country received a crypto license.
Taxation
Tax name
Index
PIT tax Min
15
PIT tax Max
24
Corporate tax (CIT)
30
Min Individual CGT (for crypto)
10
Max Individual CGT (for crypto)
10
Wealth tax Min
0
Wealth tax Max
0
The taxation system for cryptocurrencies is still in its infancy. According to Mondaq overview (13), for taxation purposes, cryptocurrencies are considered property or assets subject to CGTA. And it's confirmed by Coingeek's interpretation (14) of the Finance Act - the first document in the history of Nigeria regulating digital asset taxation. The capital gains tax (purchase of cryptocurrency) is taxed at 10%. There are no details about the CIT rate for crypto entities. However introductory CIT rate, according to PWC tax summaries (15), is between 20-30%.
