Let's be honest, when I first saw the headlines about Nigeria's Investment and Securities Act (ISA) 2025 classifying Bitcoin as a security, my heart sank. One more government intervening and killing a short-term play’s long-term home run potential, right? It was the sad, familiar tale, a choking out of innovation before it ever really has a chance to flower.

I refuse to believe this is the end of the story. I would not call this a crypto catastrophe. Instead, I am presented with a wonderful opportunity to address it. It’s not too late for Nigeria to course-correct and assert itself once again as a leader in the African crypto space.

Bitcoin is Not a Security, Period!

Seriously, let's get this straight. Trying to fit Bitcoin into the Defense Department’s “security” box is a square peg in a round hole. We’re just attempting to jam a square peg in a round hole! It doesn't work, and it actively harms the very thing you're trying to regulate.

Think of it this way: is gold a security? Of course not! It's a commodity. It's a store of value. It’s what folks turn to, to hedge against inflation and economic uncertainty. And guess what? That’s precisely what Bitcoin provides to many Nigerians contending with a rapidly devaluing Naira, hyperinflation and draconian banking policies. It’s a lifeline, it’s a way to get out and participate in the global economy.

Aggressively classifying Bitcoin as a security only creates compliance burdens that serve little purpose. This has a chilling effect on Virtual Asset Service Providers (VASPs) and Digital Asset Operators (DAOPs). This isn’t just red tape, this is a financial barrier that will inarguably fall hardest on smaller players and onto grassroots adoption. We’re referring to the dreamers, the builders, the go-getters — the very change-makers creating the future of money right in their backyard in Nigeria. Is this what we truly want to do—choke their creativity and innovation and push them beneath the surface?

Their stated purpose is to “foster innovation” and “promote the protection of investors in an efficient and cost-effective manner.” How do you cultivate innovation while simultaneously choking it to death with red tape? How can you better protect investors by pushing these businesses legit businesses offshore and into the shadows? It simply doesn't add up.

Innovation Needs Collaboration, Not Control

The greatest red flag for me was the absence of meaningful stakeholder consultation. At the time, the SEC had decided to take a top-down approach. They did so without even soliciting input from the people who are experts on Bitcoin and the crypto ecosystem. This is a textbook example of bureaucratic overreach, and it’s a formula for catastrophe.

Imagine you were trying to develop a new home and you hadn’t talked to the architect, the builder, or people who might live there. How would that be, I wonder. You'd end up with a mess, right? The same principle applies to regulation. You have to listen to the innovators, the adopters, the early spearheads, to their experts and their users, to their entrepreneurs and their researchers. You have a unique opportunity to pull together all these diverse stakeholders and experts to start crafting a responsible, smart, creative regulatory framework.

Now, here's an unexpected connection: Think about the early days of the internet. Clearly, governments were not even remotely prepared to comprehend nor regulate this radical new technology. A few attempted to tighten draconian restrictions, but those attempts were quickly beaten back. Why? Except that the internet is, by design, a decentralized, censorship-resistant platform. Bitcoin is the same. It’s something you can’t stop, but you can influence it. You’ll put yourself in the best position to help it flourish and do the most good for society.

Cybersecurity, Education, and Smart Regulation

Instead of trying to force Bitcoin into a box it doesn't fit, the SEC should focus on addressing the real risks associated with cryptocurrencies: cybersecurity and lack of education.

Think about it: how much effort is being put into educating Nigerians about wallet security, phishing scams, and other common threats? Probably not enough. The SEC’s energy would be much better spent reinforcing cybersecurity infrastructure and giving users the tools to defend themselves.

Let's talk about smart regulation. Instead of a blanket approach to digital assets, we need a nuanced framework that recognizes the distinct economic functions, governance models, and risk profiles of different cryptocurrencies. We know that not all crypto is created equal, and our regulations should reflect that.

Nigeria could be a crypto hub, an African leader in innovation and financial inclusion. To get there, we’ll need a regulatory path that is nimble, creative and cooperative. The ISA 2025 has been a major step backward, but it’s not too late to turn back on the right path.

  • Reclassify Bitcoin: Acknowledge that Bitcoin is more akin to a commodity than a security.
  • Increase Stakeholder Consultation: Engage with entrepreneurs, users, and researchers to develop a collaborative regulatory framework.
  • Prioritize Cybersecurity: Invest in cybersecurity education and awareness programs.
  • Develop a Nuanced Regulatory Framework: Recognize the distinct characteristics of different cryptocurrencies.

Let’s not waste this opportunity to do something great and new. Together, we can build a regulatory environment that promotes innovation, protects investors, and ultimately unlocks the tremendous potential of Bitcoin and other cryptocurrencies for all Nigerians. The world is watching. Let's show them what we can do.

Nigeria has the potential to be a crypto hub, a leader in innovation and financial inclusion. But to achieve that, we need a regulatory framework that is smart, flexible, and collaborative. The ISA 2025 is a step in the wrong direction, but it's not too late to change course.

Let's seize this chance to fix it, to create a regulatory environment that fosters innovation, protects investors, and unlocks the full potential of Bitcoin and other cryptocurrencies for the benefit of all Nigerians. The world is watching. Let's show them what we can do.