The House of Representatives Ad-hoc Committee on the Economic, Regulatory, and Security Implications of Cryptocurrency Adoption and Point-of-Sale (POS) Operations has described the N500 million to N1 billion capital requirement set by the Securities and Exchange Commission (SEC) for Virtual Assets Service Providers (VASPs) as excessive and counterproductive.

The committee, chaired by Hon. Olufemi Richard Bamisile, made the observation during a technical session with regulatory and security agencies at the National Assembly Complex in Abuja.

Bamisile warned that while effective regulation of the cryptocurrency sector is necessary, the high capital threshold could stifle innovation, discourage legitimate investment, and exclude emerging entrepreneurs, particularly young Nigerians who hold the potential to drive economic growth and digital transformation.

The SEC had earlier fixed the capital base for crypto operators at N500 million, but later proposed an upward review to N1 billion.

The commission explained that the measure was designed to ensure financial stability among operators and protect users’ funds.

It also mandated firms to secure a fidelity bond as insurance against internal fraud or losses.

However, stakeholders have criticised the proposal, arguing that it would favour only big firms and foreign investors, while marginalising local startups.

They warned that such a policy could push indigenous crypto businesses underground or into informal operations.

Currently, the N500 million benchmark remains in force as consultations on the proposed N1 billion threshold continue.

The SEC has issued provisional licences to a few local exchanges under its pilot regulatory framework.

Bamisile, however, urged the SEC to review the capital requirement to make it more inclusive and reflective of the realities of Nigeria’s evolving digital economy.

At the session, the Economic and Financial Crimes Commission (EFCC) disclosed that all virtual and digital assets seized from criminal activities are currently held in its custody.

The anti-graft agency said it maintains dedicated digital wallets across its zonal offices for safekeeping.

In response, the committee directed the EFCC to provide comprehensive records of all confiscated digital assets to support its ongoing legislative review and policy recommendations.

Bamisile reaffirmed the committee’s commitment to establishing a regulatory framework that balances innovation with oversight, safeguards the financial system, and promotes transparency, youth inclusion, and national security in Nigeria’s digital economy.

The committee, however, expressed concern over the failure of several key institutions including the Office of the National Security Adviser, Central Bank of Nigeria, Nigerian Communications Commission, Federal Inland Revenue Service, Ministry of Finance, and Ministry of Communications, Innovation and Digital Economy, to honour its invitation.

Bamisile urged the agencies to take seriously the economic and security implications of the rapidly evolving digital finance sector.