By Bidemi Oke
There is a strange thing about regulation: everybody wants clarity until clarity comes with a bill. Given that is probably why the conversation around Nigeria’s proposed 1.5% stamp duty on virtual asset transactions has quickly become a debate about the number. Is 1.5% too much? Will it make crypto more expensive? Will users simply move elsewhere?
Those are legitimate questions, but after spending years building in this market, I think there is a more important one: what behaviour are we about to create?
That question matters because markets rarely obey policy in the neat way policy papers imagine. Put a cost on something, and people do not simply pay it – they change how, where and with whom they transact. Which is typically true with digital assets.
Nigeria’s crypto market did not grow because people woke up one morning and decided they liked Bitcoin. It grew because people had problems that the traditional financial system was not solving quickly enough: moving money across borders, accessing dollar-denominated value, settling transactions and protecting purchasing power.
Stablecoins, especially USDT and USDC, have become a significant part of that story. The IMF estimates that stablecoins accounted for more than 65% of Nigeria’s cross-border crypto inflows in 2024, with stablecoin activity approaching the scale of recorded remittance inflows.
So when we add another cost to the formal rails, we should be honest about the possible outcome; some customers will absorb it, some will reduce their activity, and some will look for a cheaper route.
That last group is where the policy question becomes interesting. 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.
In this case, it is not an argument against taxation. It is an argument for thinking about taxation as a market-design problem.
There is also a bigger issue that gets lost in the noise – Liquidity.
In a digital asset market, liquidity is not a nice-to-have. It is part of the product. When liquidity fragments, spreads increase, execution gets worse and the cost eventually finds its way to the customer.
A policy can therefore collect revenue successfully and still weaken the market it is trying to formalise.
It is the paradox we need to avoid.
I think there are four questions every new rule for virtual assets should answer.
- Does it make the market more trustworthy?
- Does it keep legitimate liquidity inside the regulated ecosystem?
- Does it make bad behaviour harder without making ordinary activity unnecessarily difficult?
- Does it leave enough room for serious businesses to keep building?
If the answer to one of these is no, the regulation may still be necessary, but it probably needs better design. This is also why I disagree with the instinct to treat regulation and crypto innovation as natural enemies. They are not. A serious VASP does not want a market where nobody knows who is accountable, where customers have no recourse and where every transaction feels like a gamble. That kind of environment is good for opportunists and terrible for builders.
What we should be careful about is confusing more regulation with better regulation. The government’s decision to bring virtual assets more firmly into the formal financial and tax system is understandable. In fact, Nigeria has already signalled that it wants greater coordination across the agencies overseeing the sector, alongside clearer tax administration and a more deliberate framework for responsible innovation.
The question now is what happens in the details because the real competition is no longer between crypto and traditional finance. It is between jurisdictions.
Capital, founders, liquidity and users can move. If Nigeria gets this right, regulation can become an advantage. It can give serious operators certainty, give customers confidence and give institutions a reason to participate in a market they previously considered too ambiguous.
If we get it wrong, the opposite can happen. The activity will not necessarily disappear; it may simply become harder to see. Nigeria does not need a crypto market that is merely taxable, it needs one that is investable, transparent and competitive.
Bidemi Oke is the Chief Executive Officer of FlashChange, a fintech platform focused on secure digital asset exchange. He is an entrepreneur and vibrant leader, recognised for driving innovation and redefining access in the financial technology industry.
