The Securities and Exchange Commission (SEC) is tightening regulations to ensure that cryptocurrency transactions and other digitized trades are brought under the formal tax system.
This effort, aimed at boosting government revenue, represents a strategic shift from previous policies that largely discouraged crypto trading. Now, authorities are looking to tap into the booming digital economy, recognizing the financial potential that cryptocurrency transactions offer.
“The goal is to bring more transparency and structure to the sector while ensuring that eligible transactions are properly taxed,” the SEC said in an emailed response to Bloomberg on Tuesday.Read more
While the commission did not specify the expected revenue from the new taxation framework, it acknowledged that crypto transactions would contribute significantly to government earnings.
The SEC is also expanding the scope of crypto licensing, moving towards a system that encourages trading on formal, centralized exchanges. The reasoning is clear: regulated platforms will not only help the government monitor and tax transactions, but they will also offer investors greater protection.
“We anticipate gradual traction toward centralized exchanges because they will provide greater protections and comfort for investors,” the SEC stated.
The move comes as Nigeria shifts from a previously restrictive approach to cryptocurrency. In 2021, the Central Bank of Nigeria (CBN) issued a directive prohibiting financial institutions from facilitating crypto transactions. However, by December 2023, the CBN revised its stance, issuing operational guidelines for virtual asset service providers (VASPs), signaling a new regulatory openness.
The push to tax cryptocurrency aligns with broader government efforts to regulate and monetize the digital economy. In 2022, then-Minister of Finance Zainab Ahmed confirmed that provisions for taxing cryptocurrencies and other digital assets were included in the Finance Bill.
Now, with SEC Director-General Emonotimi Agama revealing that at least 50 crypto exchanges have applied for operational licenses, the country appears poised to formalize its digital financial landscape.
