by Edison Irabor, Senior Policy Reporter
ABUJA — In the wake of the Securities and Exchange Commission (SEC) Nigeria’s sweeping move to recapitalize the capital market, the nation’s intercommunity group has issued a formal statement about the development. The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) has issued a measured yet firm policy response to Circular No. 26-1, describing the new capital requirements as a “milestone” for institutionalization that simultaneously threatens to “strangle” the very innovation it seeks to regulate.
BICCoN acknowledges the SEC’s statutory duty to fortify market integrity. However, the committee warns that applying “traditional capital market logic” to a technology-led sector could have unintended consequences for Nigeria’s standing as Africa’s premier crypto hub.
The ‘Price of Admission’ Problem
The heart of the blockchain industry’s concern lies in the steep escalation of costs. Under the new regime, Digital Assets Exchanges and Custodians face a ₦2 billion capital floor, while Real-World Asset Tokenization Platforms must muster ₦1 billion.
While these figures are intended to insulate the market from systemic shocks, BICCoN argues they act as a high-tensile barrier for the “local innovators” who represent the heart of the Web3 ecosystem.
“While these thresholds are intended to mitigate systemic and consumer protection risks, they may also create unintended barriers to entry, especially for indigenous startups, innovation-driven firms, and early-stage platforms,” the statement noted.
Analytical Insight: Tech vs. Traditional Capital
The most refreshing takeaway from the BICCoN response is its challenge to the “uniform capital buffer” philosophy. In the world of traditional banking, massive cash reserves are the primary shield against insolvency. In the digital asset space, however, risk is often more effectively managed through code than through cash.
BICCoN argues that operational risks are better addressed via “governance standards, cybersecurity controls, custody rules, [and] disclosure obligations,” rather than piling up massive idle capital. By forcing these tech-powered firms to lock up billions in “mundane” reserves, the regulator risks reducing competition and encouraging “regulatory arbitrage”—where local firms move their operations to more flexible jurisdictions.
The Call for a ‘Smarter’ Approach
Rather than a “one-size-fits-all” hammer, BICCoN is advocating for a “risk-based and tiered approach.” The goal is to create a regulatory ladder that:
- aligns capital requirements with the actual functional scope of the business;
- distinguishes between custodial (high-risk) and non-custodial or infrastructure (lower-risk) services; and
- ensures that local technology firms can participate alongside deep-pocketed institutional players.
“Nigeria remains Africa’s largest digital asset market by adoption, talent, and usage,” the committee emphasized. “With smarter, coordinated, and proportionate regulation, the country can lead not only in adoption but also in regulatory excellence.”
Read also: SEC Nigeria Raises Minimum Capital for Market Operators, including VASPs as Industry Reacts.
The Road to June 2027
The SEC has provided a transition window until 30 June 2027, a move BICCoN welcomes as a “valuable window for industry adjustment.” However, the committee is urging the Commission to apply these transitional measures with “clear guidance” to prevent market uncertainty.
BICCoN reiterates its “commitment to constructive engagement with the Securities and Exchange Commission, other relevant regulators, and industry stakeholders to ensure that Nigeria’s digital asset framework evolves in a manner that is balanced, inclusive, and globally competitive.”
According to the public statement, “BICCoN speaks with one voice on behalf of this diverse constituency in its engagement with regulators, policymakers, and the public, in pursuit of a resilient, innovative, and globally competitive blockchain and digital asset industry in Nigeria.”
The BICCoN statement serves as a reminder that in the race to build a resilient financial system, regulators must be careful not to build a fortress so secure that the innovators of tomorrow can’t even get through the front door. The dialogue between the SEC and BICCoN with other relevant stakeholders over the next 18 months will likely determine whether Nigeria becomes a global leader in digital assets or remains a largely stunted market, potentially huge but realistically lean.
About BICCoN
The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) is a unified front comprising the Blockchain Nigeria User Group (BNUG), Cryptography Development Initiative of Nigeria (CDIN), Stakeholders in Blockchain Technology Development Initiative of Nigeria (SiBAN), and Network of Blockchain Solutions Advocates Association (NOBSAA), alongside independent industry experts and ecosystem leaders in Nigeria.
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