The Senate has advanced efforts to regulate Nigeria’s rapidly expanding digital asset sector, passing for second reading a bill seeking to establish a comprehensive legal and regulatory framework for virtual assets and service providers operating in the country.

The proposed legislation, titled the Virtual Asset Service Providers Regulation Bill, 2026 (SB 956), aims to provide oversight for cryptocurrencies, blockchain-based assets and other digital financial products while safeguarding investors and strengthening the nation’s financial system.

The bill, sponsored by Deputy Senate President Barau Jibrin and presented by Senate Chief Whip Mohammed Monguno during plenary, was widely supported by lawmakers who described it as a timely response to the growing influence of digital finance.

Leading the debate, Monguno said the legislation would position Nigeria to benefit fully from opportunities in the global digital economy while addressing risks associated with unregulated virtual asset activities.

He noted that millions of Nigerians, particularly young people, are actively engaged in cryptocurrency trading, fintech development and blockchain innovation, making regulation necessary to ensure transparency and investor protection.

According to him, the absence of a robust regulatory framework has created loopholes that expose citizens to fraud, financial crimes and exploitation, while posing risks to the stability of the financial system.

“The bill seeks to create a transparent, accountable and well-regulated environment that encourages innovation while ensuring responsible oversight,” he said.

Monguno added that the legislation would require virtual asset service providers to obtain licences and comply with regulations designed to protect consumers and investors.

He further explained that the framework would strengthen Nigeria’s fight against money laundering, terrorism financing and illicit financial transactions in line with global standards set by international regulatory bodies.

Contributing to the debate, Deputy Senate Leader Oyelola Ashiru lamented Nigeria’s slow pace in embracing and regulating digital assets despite the sector’s rapid global growth.

He urged lawmakers to expedite consideration of the bill, noting that countries such as Kenya, South Africa and Ghana had already made significant progress in the area.

Sen. Adetokunbo Abiru also backed the legislation but advised that it should be harmonised with existing laws governing investment securities, fintech operations and virtual assets to ensure a coherent regulatory framework.

Similarly, Sen. Shuaib Salisu said Nigeria’s position as a leading fintech hub in Africa made regulation of digital assets imperative.

He warned that the absence of clear regulations could encourage underground transactions and criminal activities, stressing that transparency was critical to unlocking the sector’s economic potential.

Salisu added that proper regulation could contribute significantly to President Bola Tinubu’s target of building a one-trillion-dollar economy by creating jobs and attracting investments in the digital space.

Sen. Natasha Akpoti-Uduaghan highlighted the challenges faced by young technology entrepreneurs due to regulatory uncertainty, arguing that Nigeria risks losing billions of dollars in investments and revenue without a clear legal framework for virtual assets.

She said proper regulation would create opportunities for innovation, entrepreneurship and employment for the country’s growing youth population.

Speaking in support of the bill, Sen. Adams Oshiomhole described the arguments in favour of the legislation as compelling, saying the need for regulation was evident given the increasing role of digital assets in modern economies.

Following the debate, lawmakers unanimously approved the bill for second reading.

The Deputy Senate President, who presided over the session, subsequently referred the legislation to the Senate Committee on Capital Market for further scrutiny and legislative input. The committee is expected to submit its report within four weeks.

Barau expressed optimism that the bill would strengthen Nigeria’s digital economy and provide a solid regulatory foundation for emerging opportunities in virtual assets, cryptocurrencies and blockchain technology.