For years, cryptocurrency served as a financial escape hatch for millions of Nigerians, offering an alternative to currency controls, inflation, and a shallow tax system. That era is set to end in 2026.
Under the Nigerian Tax Administration Act (NTAA) 2025, the Federal Government has established a framework to bring cryptocurrency transactions into the formal tax system. All digital asset activity must now be linked to Tax Identification Numbers (TINs) and National Identification Numbers (NINs). Virtual Asset Service Providers (VASPs) including exchanges and brokers are tasked with ensuring compliance, reporting transaction data, and flagging suspicious activity.
The move effectively transforms crypto from an informal store of value into a taxable component of national revenue. Nigeria is among the world’s fastest-growing crypto markets, with an estimated $92.1 billion in transaction volume between July 2024 and June 2025, much of which previously operated outside the tax system. This reflects a broader fiscal challenge: Nigeria collects less than 10 percent of GDP in taxes, one of the lowest ratios globally.
By incorporating crypto into the tax net, authorities aim to tap a rapidly expanding pool of digital wealth, targeting a tax-to-GDP ratio of 18 percent by 2027 and reducing dependence on oil revenues.
Rather than monitoring blockchains directly, the government places the compliance burden on intermediaries. VASPs must register with tax authorities, conduct know-your-customer checks, submit regular transaction reports, retain records for at least seven years, and report large or unusual transactions to the Nigerian Financial Intelligence Unit (NFIU). Penalties for non-compliance include fines of up to ₦10 million and potential license suspension or revocation.
The policy aligns Nigeria with international standards, including the OECD Crypto-Asset Reporting Framework, effectively integrating the country into the global crypto compliance system.
For users, the new rules represent a significant shift. Digital assets, long valued for speed, accessibility, and perceived anonymity, will now require TIN or NIN verification on centralized platforms. Crypto educator and platform founder C4B Freedom warned that users without proper documentation may lose access to their funds, advising some to migrate assets to self-custody solutions.
Industry observers anticipate a short-term migration toward decentralized exchanges and non-custodial wallets, which could temporarily reduce the visible tax base before stabilizing. Retail traders, in particular, fear abrupt compliance requirements could leave unprepared users exposed.
By relying on exchanges rather than direct blockchain surveillance, Nigeria is aligning with global norms. More fundamentally, the policy redefines crypto’s role from a parallel financial ecosystem to a recognized contributor to public revenue.
Whether it delivers sustained fiscal gains or merely reshapes user behavior toward decentralized alternatives will become clearer after 2026. What is already certain is that crypto in Nigeria is no longer just a financial escape hatch—it is becoming a core part of the state’s fiscal architecture.
In turning cryptocurrency into a tax base, Nigeria sends a broader message even the most decentralized forms of money are now within reach of the state in its quest for revenue beyond oil.
Elijah Adeyemi
