In a significant development for Nigeria’s burgeoning digital asset sector, Ayotunde Alabi, the Country Manager of Luno Nigeria, has emphasized that the recent regulatory advancements will catalyze increased investments in cryptocurrencies and related technologies.​Ayotunde Alabi, CEO of Luno Nigeria, has expressed optimism that the implementation of comprehensive regulations for digital assets will significantly enhance investor confidence and stimulate growth in Nigeria’s cryptocurrency sector. Alabi emphasized that clear regulatory frameworks are essential for fostering transparency, mitigating risks, and attracting both local and international investments into the digital asset space.

The enactment of the Investments and Securities Act 2025, which classifies digital assets and cryptocurrencies as securities under the purview of the Nigerian Securities and Exchange Commission (SEC), marks a pivotal shift in the country’s approach to digital finance. ​

Regulatory Clarity to Drive Investment
Alabi noted that the absence of well-defined regulations has been a barrier to institutional investment in Nigeria’s cryptocurrency market. He believes that with appropriate regulatory measures in place, investors will have the assurance needed to engage more actively in the market. This, in turn, is expected to lead to increased liquidity and the development of more robust financial products within the digital asset ecosystem.

Enhancing Investor Confidence

Alabi highlighted that the formal recognition of digital assets as securities provides much-needed clarity for investors and market participants. “Investor confidence thrives on certainty,” he stated, noting that the new legislation reduces ambiguity and increases transparency for both institutional and retail participants. ​

This regulatory clarity is expected to encourage broader participation, especially from demographics that were previously hesitant due to the lack of oversight. As consumer protection measures improve and fraudulent operators are eliminated, the market is poised for deeper penetration and adoption.

Operational Implications for Exchanges

With the SEC’s enhanced regulatory powers, exchange platforms like Luno anticipate a more robust compliance environment. Alabi mentioned that exchanges will need to strengthen internal governance structures, including onboarding processes, anti-money laundering (AML) and know-your-customer (KYC) protocols, transaction monitoring, and disclosure standards. Licensing is also expected to become more detailed and tiered, depending on the nature of services provided. ​

Broader Market Impact

The regulatory advancements are not only expected to boost investor confidence but also to attract institutional capital and foster innovation within the sector. By establishing a clear legal framework, Nigeria positions itself as a competitive player in the global digital asset market.​

Furthermore, the SEC’s commitment to regulating digital assets aims to balance innovation with consumer protection. The Commission has adopted a three-pronged objective to regulate innovation, focusing on safety, market deepening, and providing solutions to existing problems. ​

Looking ahead, Alabi is optimistic that the establishment of clear and effective regulations will position Nigeria as a leading hub for digital asset innovation in Africa. He anticipates that a well-regulated market will attract a diverse range of investors, including venture capitalists and institutional players, thereby driving the growth of the digital economy in the country.​

In conclusion, Ayotunde Alabi’s insights underscore the critical role that regulation plays in unlocking the full potential of digital asset investments in Nigeria. By fostering a secure and transparent environment, regulations can catalyze the growth of the cryptocurrency sector, benefiting investors, consumers, and the broader economy.

Conclusion

The formal recognition and regulation of digital assets in Nigeria signify a transformative period for the country’s financial landscape. With clear guidelines and oversight, the digital asset sector is poised for substantial growth, attracting both local and international investors. As platforms like Luno adapt to the evolving regulatory environment, stakeholders can anticipate a more secure and transparent market for digital asset investments.