Nigerian President Bola Tinubu has signed an executive order establishing a committee to harmonise the country's regulatory approach to virtual assets, including cryptocurrencies. The order, signed on July, aims to create a coordinated framework for regulating digital assets, a sector that has operated in a legal grey area despite significant local adoption.

The newly established committee, according to the order, will be tasked with developing a comprehensive regulatory framework for virtual assets. This follows a period of regulatory uncertainty in Nigeria, where the Central Bank of Nigeria (CBN) had previously issued directives restricting banks from dealing in cryptocurrencies, though it later moved to license virtual asset service providers. The executive order signals a shift towards formalising the market, potentially unlocking greater institutional participation and consumer protection measures.

This development in West Africa mirrors a broader trend across the continent, where regulators are moving from issuing warnings to designing structured markets. In East Africa, Tanzania's central bank, the Bank of Tanzania (BoT), recently published draft rules for crypto asset service providers. The BoT's proposed framework, which is open for public consultation, outlines licensing requirements, capital adequacy rules, and consumer protection guidelines for entities wishing to operate in the digital asset space.

The Tanzanian draft rules represent a significant evolution from the bank's previous stance, which largely involved cautioning the public about the risks of cryptocurrencies. Analysts view this as part of a regional shift, with Kenya also having introduced a tax on crypto transactions and other jurisdictions exploring regulatory sandboxes. The move towards formal regulation is often driven by a desire to combat illicit finance while harnessing the potential of blockchain technology for financial inclusion and economic growth.

Nigeria's action, through the presidential executive order, seeks to bring clarity to a market where peer-to-peer trading has flourished in the absence of clear rules. The harmonisation council is expected to involve multiple government agencies, including the CBN and the Securities and Exchange Commission (SEC), which had previously issued its own set of rules for digital assets. A unified approach could help mitigate risks for investors and integrate virtual asset services into the broader financial system.

The success of these regulatory initiatives will depend on their implementation and their ability to balance innovation with stability. Observers note that overly restrictive rules could stifle a vibrant sector, while a lack of oversight could expose consumers to fraud and market volatility. The coming months will be critical as both Nigeria and Tanzania finalise their respective frameworks, setting precedents for other African nations navigating the complex landscape of virtual asset regulation.