The Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) has expressed appreciation for the Federal Government’s ongoing steps to integrate virtual and digital assets into the nation’s formal economy, while warning that excessively high capital requirements, registration fees, and heavy taxation threaten the growth of the young sector.

Speaking on the recently released Securities and Exchange Commission (SEC) proposed rules for virtual asset service providers, SIBAN President, Mela Claude Ake, highlighted the positive market signal created by moving away from outright prohibitions toward formal regulation.

“We definitely are appreciative of the fact that policymakers and the legislature are embracing blockchain and virtual assets. Creating clear rules sends the right signal to domestic and global investors that there is no longer a regulatory grey area and that the government no longer views the sector as a criminal enterprise. It formally co-opts virtual assets into the economic mainstream,” said Ake.

Despite welcoming the regulatory clarity, SIBAN, yesterday, raised serious concerns regarding the financial entry barriers introduced in the proposed guidelines, where the new rules outline minimum capital requirements running into billions of naira alongside registration fees in the hundreds of millions.

Combined with the Nigeria Revenue Service (NRS) virtual assets taxation guidelines, which mandate a 1.5 per cent stamp duty on crypto transactions, SIBAN cautioned that these fiscal burdens risk stifling startup growth before the industry fully matures.

“The vast majority of innovators in this sub-sector do not come from big money. Creating capital requirements in the billions and registration fees in the hundreds of millions is highly problematic.

When combined with transaction-level stamp duties, the government runs the risk of milking a cow that is not yet fully mature,” the association added.

Meanwhile, SIBAN urged the government to adopt a more supportive policy stance aimed at helping local operators attract investment, build legitimate operations and compete globally. To support nascent growth, the government should shift its policy focus from revenue extraction to nurturing domestic tech talent and emerging ventures.

Further, policymakers must mitigate the risk of local founders and capital relocating to more accommodating offshore jurisdictions to prevent brain drain. Finally, creating a regulatory environment that builds credibility while maintaining accessible pathways for early-stage startups will encourage overall investor confidence.

“This is the time for the government to be more protective of the industry to sow and invest in its future rather than extract from it. If we continue with extreme registration fees, capital hurdles, and heavy levies, it will chase away both local innovators and foreign investors to countries ready to accommodate them,” the association noted further.