Coordinated but Fragmented? A Comparative Analysis of Nigeria’s Virtual Asset Regulatory Framework and the EU’s MiCA Regime

INTRODUCTION

Virtual assets have outgrown the institutional boundaries that most legal systems use to organise financial regulation. A single token can simultaneously resemble a currency, a commodity, a payment instrument and a security, so that the question ‘who regulates this?’ rarely has one settled answer. Nigeria and the European Union illustrate two contrasting responses to that difficulty. Nigeria, one of the largest peer-to-peer cryptocurrency markets in the world, has moved in less than two years from a posture of banking-sector prohibition to statutory recognition of virtual assets as securities under the Investments and Securities Act 2025 (“ISA 2025”)¹, and then to an executive attempt at inter-agency harmonisation through the Presidential Executive Order on Virtual Assets Coordination, 2026 (“the Executive Order”)². The European Union, by contrast, has legislated a single, directly applicable instrument — the Markets in Crypto-Assets Regulation (“MiCA”)³ — that replaces twenty-seven divergent national regimes with one rulebook and one passportable licence.

This article argues that Nigeria’s reforms mark genuine progress in reducing the legal uncertainty that long discouraged formal participation in its virtual asset market, but that the resulting framework remains structurally different from, and less complete than, the EU model. Nigeria has achieved coordination between regulators without achieving codification of a single substantive rulebook; the EU has achieved both. Part II traces Nigeria’s regulatory trajectory from prohibition to coordinated recognition. Part III sets out MiCA’s design. Part IV compares the two regimes across institutional architecture, definitional clarity, licensing and enforcement. Part V assesses whether Nigeria’s framework is properly described as “coordinated but fragmented,” and Part VI offers recommendations.

NIGERIA’S REGULATORY JOURNEY: FROM PROHIBITION TO COORDINATED RECOGNITION

The Prohibition Era and Regulatory Uncertainty

Nigeria’s early approach to virtual assets was characterised by caution bordering on hostility. In September 2020, the Securities and Exchange Commission (“SEC”) issued a Statement on Digital Assets and their Classification and Treatment, sorting virtual assets into categories such as crypto assets, utility tokens and security tokens, and signalling that security-type tokens would fall within its regulatory perimeter⁴. Barely five months later, the Central Bank of Nigeria (“CBN”) directed banks to identify and close accounts linked to cryptocurrency transactions, effectively severing the formal banking sector from the crypto economy⁵. The result was a jurisdictional contradiction: the securities regulator asserted an interest in supervising certain tokens, while the banking regulator foreclosed the financial infrastructure such supervision would require. Trading did not stop; it moved to peer-to-peer channels that were harder to monitor and offered users less protection. The CBN partially reversed course in December 2023, permitting banks to operate accounts for licensed virtual asset service providers subject to conditions⁶, but the absence of a statutory definition of virtual assets meant that licensing and investor protection still rested on administrative circulars rather than legislation.

ISA 2025: Statutory Recognition of Virtual Assets as Securities

The Investments and Securities Act 2025, assented to on 31 March 2025 and repealing the Investments and Securities Act 2007, addressed this gap directly. It amends the statutory definition of “securities” to expressly include virtual and digital assets, bringing cryptocurrencies, non-fungible tokens, digital currencies and similar instruments within the SEC’s regulatory perimeter for the first time as a matter of primary legislation rather than administrative interpretation⁷. The Act further recognises Virtual Asset Service Providers, Digital Asset Operators and Digital Asset Exchanges as capital market operators, subject to registration, fit-and-proper requirements, capital adequacy standards and the SEC’s enforcement powers⁸. Commentators have rightly described this as ending the “grey area” that previously left digital asset businesses uncertain whether their activities were lawful at all⁹,¹⁰. What ISA 2025 does not do, however, is resolve the CBN’s parallel and separately sourced authority over payments, banking and monetary policy, which continues to bear on virtual assets used as a means of exchange or store of value rather than as an investment. The Act reforms securities law; it does not, on its own, reform the wider institutional map.

The Executive Order on Virtual Assets Coordination, 2026: Institutional Harmonisation

On 17 July 2026, President Bola Ahmed Tinubu signed the Presidential Executive Order on Virtual Assets Coordination, 2026, made pursuant to section 5 of the Constitution and effective immediately¹¹,¹². Rather than creating a new statutory regulator, the Order establishes a Virtual Asset Council, chaired by the CBN, with the Nigeria Revenue Service and the SEC as vice-chairs and the Nigerian Financial Intelligence Unit and the Office of the National Security Adviser as participants, together with a permanent Virtual Asset Office hosted by the CBN and a regulatory sandbox for virtual asset innovation¹³,¹⁴. The Order allocates responsibility functionally: the SEC regulates security-related virtual assets and investment products, the CBN regulates non-securities-related virtual assets such as payment, settlement and custody activity, and the Council resolves disputes where jurisdiction is unclear¹⁵. Local and offshore platforms serving Nigerian users must register and meet prescribed due diligence and cybersecurity standards, with compliant entities gaining improved access to banking services¹⁶,¹⁷. Commentators describe the Order as establishing Africa’s first cross-sectoral coordination framework for virtual assets, implementing recommendations developed at industry-regulator engagements held earlier in 2026¹⁸,¹⁹. The Order is, on its own terms, a coordination instrument rather than a codification of substantive rights and obligations: it does not amend ISA 2025’s definition of securities, nor create a single statutory test distinguishing “securities-related” from “non-securities-related” virtual assets. That boundary is instead worked out through the Council’s practice — a continuing source of legal uncertainty examined further below²⁰.

III. THE EUROPEAN UNION’S MiCA REGIME: A SINGLE RULEBOOK APPROACH

Legislative Design and Phased Implementation

MiCA was adopted as a Regulation, a legal form directly applicable in all twenty-seven Member States without national transposition²¹. This is the single most important structural choice in the EU’s approach: rather than harmonising national laws through a directive, the Union legislated one substantive rulebook binding Member States identically. MiCA’s provisions were phased in over eighteen months. Rules on asset-referenced tokens and e-money tokens took effect on 30 June 2024, while the remaining provisions — covering public offers of other crypto-assets and authorisation of Crypto-Asset Service Providers (“CASPs”) — applied from 30 December 2024²²,²³. A transitional regime permitted CASPs lawfully operating under pre-existing national law to continue for up to eighteen months, with a final deadline of 1 July 2026 to obtain authorisation or cease operating²⁴,²⁵. This staged timetable gave regulators and industry a fixed, publicly known runway for compliance, a feature notably absent from Nigeria’s more incremental reform process.

CASP Authorisation and Passporting

Under MiCA, a firm wishing to provide crypto-asset services — including custody, operation of a trading platform, exchange services, execution of orders, advice or portfolio management — must obtain authorisation as a CASP from the competent national authority of a single Member State²⁶. Once granted, that authorisation is valid across the entire Union through a passporting mechanism, allowing a CASP to provide services in all Member States without separate national licences²⁷. This single-licence, EU-wide model directly replaced a patchwork of national virtual asset service provider registrations that had previously existed in individual Member States such as France, Luxembourg, Malta and Estonia, each with its own registration criteria²⁸.

Regulation of Asset-Referenced Tokens and E-Money Tokens

MiCA imposes a distinct and more stringent regime on issuers of asset-referenced tokens (“ARTs”) and e-money tokens (“EMTs”) — broadly, stablecoins — reflecting regulatory concern about the systemic risk such instruments can pose if reserves are inadequate or opaque²⁹. Issuers must maintain sufficient liquid reserves to back tokens in circulation, publish a detailed whitepaper meeting prescribed disclosure standards, satisfy minimum capital requirements and submit to regular independent audits of their reserves³⁰,³¹. This targeted stablecoin regime is one of the clearest examples of MiCA translating a specific market risk into a specific statutory obligation, rather than leaving the point to be resolved by administrative practice.

COMPARATIVE ANALYSIS: COORDINATION VERSUS CODIFICATION

Institutional Architecture

Both models distribute supervisory functions across more than one authority, but the distribution differs fundamentally. Nigeria’s Executive Order layers a coordinating Council on top of pre-existing regulators — the SEC under ISA 2025 and the CBN under its own guidelines — without merging or replacing either’s original jurisdiction³²,³³. Substantive rules therefore remain split across at least three instruments: ISA 2025, CBN guidelines, and the Executive Order itself, with a forthcoming tax policy adding a fourth. The EU’s national competent authorities, by contrast, administer one directly applicable Regulation, so the substantive rules they enforce do not vary by State even though the identity of the supervisor does³⁴,³⁵. Put differently, EU fragmentation is confined to the choice of supervisor; Nigerian fragmentation extends to the choice of applicable law.

Definitional Clarity and Scope

MiCA supplies a granular taxonomy — crypto-assets generally, ARTs, EMTs and other tokens — and carves out instruments already regulated as financial instruments under EU securities law, reducing overlapping claims of jurisdiction³⁶,³⁷. ISA 2025 achieves recognition of virtual assets differently: by amending the definition of “securities” itself, it absorbs virtual assets into an existing category rather than creating a freestanding taxonomy³⁸. The Executive Order then reintroduces a distinction — “securities-related” versus “non-securities-related” virtual assets — that ISA 2025 does not itself define, leaving the Council to develop that boundary through administrative practice rather than a codified test³⁹,⁴⁰. For a naira-referenced stablecoin, plausibly either a payment instrument within CBN’s remit or an investment-like asset resembling an EU-style ART, this gap is more than academic: it determines which regulator, licence and obligations apply.

Licensing and Market Access

MiCA’s passporting mechanism is, in one sense, not directly transferable to Nigeria, since passporting solves a problem — twenty-seven separate national markets — that a unitary state does not have. But the underlying design principle, a single licence covering the full range of an operator’s virtual asset activities, remains instructive. Under the current Nigerian arrangement, a virtual asset business whose activities touch both securities-type products and payment-type functions may need to satisfy both SEC registration under ISA 2025 and CBN requirements under its guidelines, since the Executive Order coordinates rather than consolidates those two regimes⁴¹,⁴²,⁴³. This dual-licensing exposure is precisely the inefficiency that MiCA’s single CASP authorisation was designed to eliminate at Union level, even though the EU’s problem was horizontal (between States) rather than vertical (between regulators) fragmentation⁴⁴,⁴⁵.

Enforcement and Investor Protection

MiCA is enforced as directly applicable law, with mandatory disclosure through whitepapers, harmonised conduct-of-business rules, and a supervisory architecture reinforced by European-level technical standards; by 2026, national authorities had reportedly imposed substantial monetary penalties for non-compliance⁴⁶. Nigeria’s enforcement architecture is younger and still assembling itself: ISA 2025 confers sanctioning powers on the SEC over registered capital market operators, and the Executive Order adds registration, know-your-customer and cybersecurity obligations backed by the threat of exclusion from banking services for non-compliant platforms⁴⁷,⁴⁸. What Nigeria does not yet have is a single, dedicated enforcement regime for virtual assets as such; enforcement instead proceeds through the SEC’s general securities powers, CBN’s banking-sector controls, and the Council’s coordinating authority, applied together rather than through one unified statutory mechanism.

IS NIGERIA “COORDINATED BUT FRAGMENTED”? A CRITICAL ASSESSMENT

The evidence supports an affirmative answer, understood precisely. Nigeria is coordinated in that, for the first time, its principal financial, revenue and security agencies operate within a single forum — the Virtual Asset Council — with a shared office, a shared sandbox, and an agreed mechanism for resolving jurisdictional disputes⁴⁹,⁵⁰. It remains fragmented in that this coordination is layered on top of, rather than substituted for, several separately sourced instruments: ISA 2025 supplies securities-law recognition, CBN guidelines supply banking-sector access, the Executive Order supplies inter-agency process, and a dedicated tax policy is still to come⁵¹,⁵²,⁵³. MiCA, by contrast, is fragmented only administratively — different national authorities apply the same rules — while its substance is unified in a single Regulation. The distinction matters: an executive order, unlike a statute passed by the National Assembly, derives its authority from the President’s residual constitutional powers and can be varied, superseded or challenged as encroaching on functions the SEC and CBN already hold under their own Acts⁵⁴. Nigeria’s reform is thus a genuine but transitional achievement — it narrows the uncertainty that discouraged formal participation, without yet matching the durability and definitional completeness a single, directly applicable statute provides.

RECOMMENDATIONS

First, the National Assembly should legislate a consolidated Virtual and Digital Assets Act that absorbs the coordination functions currently performed by executive order, giving the Virtual Asset Council and Virtual Asset Office a statutory rather than purely executive foundation and thereby insulating them from being unwound by a future administration. Second, that Act should itself define the boundary between securities-related and non-securities-related virtual assets, rather than leaving the distinction to be developed administratively by the Council, so that issuers can determine their regulator in advance rather than through a dispute-resolution process. Third, Nigeria should consider adapting MiCA’s tiered treatment of stablecoins — reserve backing, mandatory whitepapers, capital requirements and independent audits — given the significant use of stablecoins in Nigeria for remittances and as a hedge against naira volatility⁵⁵. Fourth, policymakers should explore a single-licence model under which one registration, assessed jointly by the SEC and CBN through the Council, authorises the full range of a virtual asset business’s activities, reducing the dual-licensing burden that the current functional split can produce. Finally, subsidiary rules under the Executive Order should be published on a fixed and public timetable, following MiCA’s example of dated, phased implementation, since a coordination framework retains credibility only if its promised rules materialise on schedule⁵⁶,⁵⁷.

VII. CONCLUSION

Nigeria and the European Union have both recognised that virtual assets can no longer be regulated by silence, prohibition or improvisation. Their chosen paths, however, differ in kind rather than merely in detail. The European Union chose codification first: a single, directly applicable Regulation that defines crypto-assets, licenses their service providers once for the whole Union, and only then leaves supervision to national authorities. Nigeria has, so far, chosen coordination first: a statutory amendment bringing virtual assets within securities law, followed by an executive order binding existing regulators into a common forum, with full codification of the underlying substantive rules still to come. The Executive Order on Virtual Assets Coordination, 2026 is a meaningful and, within Africa, pioneering step toward regulatory coherence. But coordination between regulators is not the same achievement as codification of the law they apply, and until Nigeria closes that remaining gap, its framework will remain, in the terms of this article’s title, coordinated but fragmented.

BIBLIOGRAPHY

Investments and Securities Act 2025 (Nigeria).

Presidential Executive Order on Virtual Assets Coordination, 2026 (Nigeria).

Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets [2023] OJ L150/40.

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FOOTNOTE(S):

1. Investments and Securities Act 2025 (Nigeria), s 357 (definition of ‘securities’).
2. Presidential Executive Order on Virtual Assets Coordination, 2026 (Nigeria), made pursuant to section 5 of the Constitution of the Federal Republic of Nigeria 1999 (as altered).
3. Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on Markets in Crypto-Assets [2023] OJ L150/40 (‘MiCA’), Title III.
4. Securities and Exchange Commission (Nigeria), Statement on Digital Assets and Their Classification and Treatment (14 September 2020).
5. Central Bank of Nigeria, Letter to All Deposit Money Banks, Non-Bank Financial Institutions and Other Financial Institutions, Ref BSD/DIR/PUB/LAB/014/001 (5 February 2021).
6. Central Bank of Nigeria, Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers (December 2023).
7. Investments and Securities Act 2025 (Nigeria), s 357.
8. Investments and Securities Act 2025 (Nigeria), ss 3, 13 and Part on Capital Market Operators.
9. Aluko & Oyebode, ‘ISA 2025 and NTAA 2025: Further Developments in the Regulatory Oversight of Virtual Assets’ (July 2025) https://www.aluko-oyebode.com/insights/digital-asset-regulation-nigeria-2025/ accessed 1 September 2026.
10. Pavestones Legal, ‘Impact of the Investment & Securities Act (2025) on Ownership and Use of Virtual Assets in Nigeria’ (2025) https://pavestoneslegal.com/impact-of-the-investment-securities-act-2025-on-ownership-and-use-of-virtual-assets-in-nigeria/ accessed 1 September 2026.
11. Presidential Executive Order on Virtual Assets Coordination, 2026 (Nigeria).
12. The State House, Abuja, ‘President Tinubu Signs Executive Order on Virtual Assets, Establishes Council to Harmonise Regulation of Digital Economy’ (17 July 2026) https://statehouse.gov.ng/president-tinubu-signs-executive-order-on-virtual-assets-establishes-council-to-harmonise-regulation-of-digital-economy/ accessed 1 September 2026.
13. Ibid.
14. Afriwise, ‘Nigeria Moves Towards a More Coordinated Virtual Asset Regulatory Framework’ (30 July 2026) https://www.afriwise.com/blog/nigeria-moves-towards-a-more-coordinated-virtual-asset-regulatory-framework accessed 1 September 2026.
15. Aiying License & Compliance, ‘Nigerian President Signs Executive Order on Virtual Assets’ (18 July 2026) https://license.aiying.cc/en/global-compliance/nigeria-tinubu-virtual-asset-executive-order-regulatory-framework-2026/ accessed 1 September 2026.
16. Ibid.
17. Financial Nigeria, ‘An Analysis of the Executive Order on Virtual Assets 2026’ (August 2026) https://www.financialnigeria.com/an-analysis-of-the-executive-order-on-virtual-assets-2026-feature-653.html accessed 1 September 2026.
18. Banwo & Ighodalo, ‘Presidential Executive Order Boosts Virtual Assets Regulation in Nigeria’ (22 July 2026) https://www.banwo-ighodalo.com/grey-matter/presidential-executive-order-boosts-virtual-assets-regulation-in-nigeria/ accessed 1 September 2026.
19. Aiying License & Compliance (n 15).
20. BOC Legal, ‘Nigeria’s Virtual Assets Executive Order 2026’ (22 July 2026) https://ogunyemisolicitors.org/nigeria-virtual-assets-executive-order-2026/ accessed 1 September 2026.
21. MiCA (n 3), Title III.
22. K&L Gates, ‘The Regulation on Markets in Crypto-Assets Becomes Fully Applicable in All Member States of the European Union’ (24 January 2025) https://www.klgates.com/The-Regulation-on-Markets-in-Crypto-Assets-Becomes-Fully-Applicable-in-All-Member-States-of-the-European-Union-1-24-2025 accessed 1 September 2026.
23. Dechert LLP, ‘Application of Second Part of MiCA’ (8 January 2025) https://www.dechert.com/knowledge/onpoint/2025/1/application-of-second-part-of-mica—regulation-of-casps-and-oth.html accessed 1 September 2026.
24. Ibid.
25. Sumsub, ‘MiCA Regulation and EU Crypto Rules: What Changes in 2026’ (13 January 2026) https://sumsub.com/blog/crypto-regulations-in-the-european-union-markets-in-crypto-assets-mica/ accessed 1 September 2026.
26. MiCA (n 3), art 149; Autorité des Marchés Financiers, ‘The European Regulation Markets in Crypto-Assets (MiCA)’ https://www.amf-france.org/en/news-publications/depth/mica accessed 1 September 2026.
27. Cyfrin, ‘MiCA Regulation Explained: A Guide to EU Crypto Compliance’ https://www.cyfrin.io/blog/mica-regulation-explained-a-guide-to-eu-crypto-compliance accessed 1 September 2026.
28. Sumsub (n 25).
29. MiCA (n 3), Title II (arts 4–15).
30. Ibid.
31. Cyfrin (n 27).
32. Presidential Executive Order on Virtual Assets Coordination, 2026 (Nigeria).
33. Aiying License & Compliance (n 15).
34. MiCA (n 3), Title III.
35. Autorité des Marchés Financiers (n 26).
36. MiCA (n 3), Title III.
37. MiCA (n 3), Title II.
38. Investments and Securities Act 2025 (Nigeria), s 357.
39. Aiying License & Compliance (n 15).
40. BOC Legal (n 20).
41. Investments and Securities Act 2025 (Nigeria), ss 3, 13.
42. Central Bank of Nigeria, Guidelines (n 6).
43. Aiying License & Compliance (n 15).
44. Autorité des Marchés Financiers (n 26).
45. Cyfrin (n 27).
46. Cyfrin (n 27).
47. Investments and Securities Act 2025 (Nigeria), ss 3, 13.
48. Aiying License & Compliance (n 15).
49. The State House, Abuja (n 12).
50. Afriwise (n 14).
51. Investments and Securities Act 2025 (Nigeria), s 357.
52. Central Bank of Nigeria, Guidelines (n 6).
53. Presidential Executive Order on Virtual Assets Coordination, 2026 (Nigeria).
54. BOC Legal (n 20).
55. MiCA (n 3), Title II.
56. K&L Gates (n 22).
57. Sumsub (n 25).