Nigeria is poised to introduce taxes on cryptocurrency transactions as the use of stablecoins in the country reaches $21.8 billion, according to Georg Brameshuber, a crypto advisor. Brameshuber questioned whether this regulation will "support adoption or slow" growth in a statement made on March 8 via X.
"Nigeria is gearing up to tax crypto transactions, with a new bill expected to pass this quarter," said Brameshuber, crypto advisor and co-founder. "84% of Nigerians own crypto wallets (second globally), $21.8B in stablecoin transactions amid inflation, The SEC is expanding exchange licensing to monitor & tax. Regulation is coming but will it support adoption or slow it down?"
According to a report by Digwatch, Nigeria plans to update its digital asset regulations to include these taxes, with a bill currently in the National Assembly expected to pass within this quarter. The Securities and Exchange Commission (SEC) is expanding licensing to regulate exchanges and ensure tax compliance, having issued its first exchange license in August 2024. As Nigeria ranks second globally in crypto adoption, many Nigerians are using stablecoins like Tether and USD Coin as a hedge against inflation.
Georg Brameshuber's post
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Cointelegraph reports that Nigeria is embracing cryptocurrency as a tool for financial inclusion and economic growth while implementing regulations aimed at ensuring security and consumer protection. With over $21.8 billion in stablecoin transactions and one of the highest global crypto adoption rates, the government is transitioning from restrictive policies towards balanced oversight.
Another report by Cointelegraph highlights that Nigeria's new cryptocurrency tax aims to boost government revenue by targeting digital transactions in a market where 22% of the population owns crypto assets. The government projects that regulating exchanges and taxing transactions could generate up to 200 billion naira ($250 million) annually. With only 9% of Nigeria’s 70 million taxable adults paying income tax and the informal sector comprising 65% of GDP, authorities view crypto taxation as an opportunity to expand the tax base. However, peer-to-peer trading prevalence and limited enforcement capacity may impact tax collection efforts and overall compliance.
Brameshuber is the co-founder of Validvent and serves as a board member of the Digital Asset Association Austria (DAAA). He is also a certified tax advisor and Web3 entrepreneur with five years of experience researching and teaching crypto economics at the University of Vienna. According to his LinkedIn page, Brameshuber offers advisory services on crypto tax and digital assets while providing consulting for Web3 startups.