By Ayomide Otitoju
The proposed 1.5 per cent stamp duty on virtual asset transactions in Nigeria has sparked debate over whether the levy will make cryptocurrency transactions more expensive and push users towards alternative channels.
However, Bidemi Oke, a crypto industry professional, argues that the bigger concern is not simply the size of the levy but the behaviour it could create across the market.
Oke said regulation often brings clarity to an industry, but added that introducing additional costs could influence how, where and with whom people transact.
According to Oke, Nigeria’s crypto market expanded partly because users needed alternatives for cross-border payments, access to dollar-denominated value, transaction settlement and protection against declining purchasing power.
Stablecoins such as USDT and USDC have become an important part of that market. Oke cited International Monetary Fund estimates indicating that stablecoins accounted for more than 65 per cent of Nigeria’s cross-border crypto inflows in 2024.
He warned that increasing costs on formal and regulated platforms could encourage some users to seek cheaper alternatives.
“If legitimate platforms become materially more expensive while informal channels remain accessible, we have not eliminated demand. We may simply have made the less visible part of the market more attractive,” he said.
Oke stressed that his concern was not opposition to taxation but the need to approach taxation as a market-design issue.
He also highlighted liquidity as a major consideration for Nigeria’s digital asset market, noting that fragmented liquidity could increase spreads, worsen transaction execution and ultimately raise costs for customers.
According to him, a policy could generate government revenue while simultaneously weakening the market it is intended to formalise.
Oke said future virtual asset regulations should be assessed against four key questions: whether they make the market more trustworthy, keep legitimate liquidity within the regulated ecosystem, make misconduct harder without unnecessarily restricting ordinary transactions, and leave sufficient room for legitimate businesses to grow.
He argued that regulation and crypto innovation should not be viewed as opposing forces.
A well-regulated market, he said, could provide customers with greater protection, establish accountability and encourage serious businesses and institutions to participate.
However, Oke cautioned against equating increased regulation with better regulation, stressing that the effectiveness of Nigeria’s emerging framework would depend largely on its implementation.
He noted that Nigeria’s move to bring virtual assets more firmly into the formal financial and tax system could provide greater certainty for businesses and investors if properly designed.
According to Oke, the issue is increasingly becoming a competition between jurisdictions as capital, entrepreneurs, liquidity and users can move across borders.
He said effective regulation could give Nigeria an advantage by providing certainty to legitimate operators, confidence to customers and a clearer path for institutional participation.
“If we get it wrong, the activity will not necessarily disappear; it may simply become harder to see,” he said.
Oke concluded that Nigeria should aim for a crypto market that is not only taxable but also investable, transparent and competitive.
