The federal government is working on a new policy that will reshape how Nigerians interact with virtual assets—cryptocurrency, stablecoins and digital tokens.

The new Virtual Asset Regulatory (VAR) framework is being touted as a “new supervisory architecture” that will bring enhanced security, stability, transparency, innovation, and consumer protection to Nigeria’s virtual assets landscape.

Here’s what you need to know about it:

What’s the new VAR framework all about?

• The new VAR framework will operate as a Virtual Asset Regulatory Authority (VARA), comprising the Central Bank of Nigeria (CBN) and the Nigeria Revenue Service (NRS).
• But – a big ‘but’ here: It will, according to the government, operate as a “coordinating arrangement” instead of a “standalone regulator.” So, for those wondering, not another government agency, thankfully.
• All existing agencies that currently have one form of oversight or the other over virtual assets, like the CBN, NRS, SEC, and NFIU, will retain their mandates; VARA simply ensures they stop working in silos. VARA, which has already been established by presidential directive in August 2025, will comprise three complementary parts:
  • The Virtual Asset Regulatory Council (VARC), as the strategic coordination body, co-chaired by the CBN Governor and NRS Executive Chairman, and including other relevant agencies.
  • The Virtual Asset Regulatory Office (VARO), for operational coordination and supervision, focused on non-security virtual assets.
  • Agency-based Virtual Asset Regulatory Teams: supervisory units within the various stakeholder agencies, focused on regulation within their respective statutory mandates

Securities vs Non-securities: An important distinction

• VARA will focus exclusively on the regulation of activities involving “non-security virtual assets”—these activities will include issuance, custody, payment services, banking services, and exchange services.
• What are non-security virtual assets? They include, but are not limited to, currency-pegged stablecoins, payment tokens, and tokenised deposits.
• Virtual assets classified as securities will continue to be regulated by the Securities and Exchange Commission (SEC).

What does this mean for virtual assets in Nigeria?

• Virtual assets are no longer marginal in Nigeria. Between July 2024 and June 2025, Nigerians conducted virtual asset transactions valued at an estimated $92.1 billion. That’s just the formal market, not the informal, invisible market (peer-to-peer and Order-to-Cash (OTC) transactions).
• So, clearly, the virtual asset market requires strong and robust safeguards, a delineation of responsibilities and obligations, and user/consumer protection. Nigeria also needs to be sure that virtual assets are not being used to enable crime: money laundering, financing terrorism, etc. This, in a nutshell, is what the VARA framework is promising to accomplish.
• Operators—whether homegrown exchanges or offshore platforms serving Nigerian users—will need to register, meet baseline standards on client asset protection, KYC and cybersecurity, and accept ongoing reporting obligations.
• In return, they gain formal recognition, banking access and eligibility for regulated partnerships. A Virtual Asset Sandbox will allow firms to operate under supervised conditions while full licensing rules are phased in.
• The government says it is deliberately avoiding rushing to make new legislation (this could come later)—instead, it is choosing to kick off by empowering existing regulators to act within existing frameworks.

What else do you need to know?

• Nigeria seems to be following the Dubai model – In 2022, the UAE established a Virtual Assets Regulatory Authority (VARA) “as a transparent and trusted guiding authority for the emerging world of virtual assets.”
• The Dubai VARA did say that it “aims to take its mission global by creating an easy-to-replicate framework to regulate the industry.” Looks like that mission is working just as intended, serving as a model that Africa’s largest economy is now seeking to replicate.
• At launch, VARA will be Africa’s first operational independent regulatory framework for virtual assets.
• One question on the minds of watchers will be about the implementation of what no doubt is a commendable vision. Will VARA be the intended catalyst for Nigeria’s digital economy (and $1 trillion by 2030 economic vision of President Tinubu) – or yet another troublesome layer of bureaucracy?