Financial institutions and cryptocurrency companies should collaborate for mutual benefits, according to KPMG's latest report.
In the ever-evolving world of cryptocurrency, three African nations - Nigeria, Rwanda, and South Africa - are making significant strides in shaping their regulatory landscapes.
Last year, South Africa's tax authority, SARS, announced its exploration of AI-driven tools to enhance cryptocurrency tracking and enforcement. Fast forward to mid-2025, and Nigeria has established a comprehensive regulatory framework, recognizing cryptocurrencies as securities under the 2025 Investments and Securities Act (ISA 2025). The Nigerian Securities and Exchange Commission (SEC) now oversees virtual asset service providers (VASPs), digital asset exchanges, and stablecoin issuers.
Nigeria's framework mandates licenses for crypto firms, AML/KYC compliance, verifiable stablecoin reserves, regular audits, and fosters innovation through a regulatory sandbox. However, national banks in Nigeria still retain authority to restrict digital asset transactions. The licensing process for crypto firms is underway, albeit slightly delayed for due diligence, with firms like Blockchain.com showing interest in establishing physical presences in Nigeria.
The Nigerian Federal Inland Revenue Service (FIRS) is planning to introduce cryptocurrency taxation legislation soon. Meanwhile, in a cautious approach, Rwanda continues to experiment with fintech innovation and blockchain pilots but has yet to announce sweeping formal crypto regulations or licensing frameworks similar to Nigeria or South Africa’s recent moves.
South Africa, on the other hand, takes a more institutional and regulatory compliance-focused approach. Its Financial Sector Conduct Authority (FSCA) has been actively issuing cryptocurrency licenses, with over 63 new approvals recorded in Q2 2024. The country boasts strong institutional crypto adoption, with large volumes of transactions and a significant portion of the population involved in crypto ownership or purchase.
South African banks and financial institutions emphasize integrating cryptocurrencies within conventional finance, supporting licensed firms rather than retail-dominated markets. The comparison notes that Nigeria’s market is more retail- and remittance-driven, while South Africa’s is institutionally led and professionally regulated.
Crypto firms in Nigeria are preparing for compliance with the new licensing and regulatory standards, despite some initial delays. The SEC’s regulatory sandbox has attracted international crypto companies' interest. Domestic firms appear aligned with the government’s push towards "responsible innovation," AML/KYC compliance, and cross-border use cases, especially for stablecoins.
In South Africa, licensed crypto firms are growing rapidly, supported by an established regulatory regime that instills confidence in institutional and retail investors. Financial institutions like ABSA Bank have digital asset heads, signaling mainstream banking sector involvement in crypto adoption. The regulatory environment encourages formal licensing and integration with existing financial systems, which South African crypto firms appear to support enthusiastically.
In conclusion, while each country approaches cryptocurrency regulation differently, a common theme emerges: a focus on compliance, integration with traditional finance, and fostering a conducive environment for responsible innovation. The table below summarizes the regulatory status, highlights, and financial/institutional responses in each country.
Summary Table
| Country | Regulatory Status (2025) | Crypto Regulation Highlights | Financial/Institutional Response | |---------------|---------------------------------------------------|------------------------------------------------------|----------------------------------------------------------| | Nigeria | Cryptocurrencies legally recognized as securities; SEC regulates VASPs and stablecoins under ISA 2025 | Mandatory licensing, AML/KYC, stablecoin audits, regulatory sandbox, planned transaction tax | Crypto firms aligning with licensing; banks retain partial restrictions; international firms interested | | Rwanda | No detailed or updated crypto regulations reported | Early-stage fintech/blockchain experimentation; cautious regulatory stance | Limited institutional engagement or firm formal response evident based on available data | | South Africa | FSCA issues crypto licenses; strong regulatory environment | Over 63 licenses issued in Q2 2024, integrated approach with traditional finance | High institutional adoption; active licensed firms; strong collaboration with financial institutions |
This assessment relies on the most recent information available from July 2025 and reflects key regulatory and market developments shaping crypto adoption and compliance in these countries. Notably, SARS has been auditing individual crypto activity for the past five years, collaborating with crypto exchanges to obtain user data and compare it with tax filings. The South African Revenue Service (SARS) has launched a specialized crypto tax unit. Income from crypto mining and airdrops is taxed at 45% in South Africa, and there is a call for regulatory clarity around bitcoin's onshore status in South Africa. Binance has blocked Nigerian users access to free token rewards and airdrops.
- Nigeria, Rwanda, and South Africa are each making unique strides in shaping the regulatory landscape for cryptocurrency in Africa.
- South Africa's tax authority, SARS, has been exploring AI-driven tools to track and enforce cryptocurrency transactions since last year.
- In mid-2025, Nigeria established a comprehensive regulatory framework, recognizing cryptocurrencies as securities under the 2025 Investments and Securities Act (ISA 2025).
- The Nigerian Securities and Exchange Commission (SEC) now oversees various crypto-related entities, including virtual asset service providers (VASPs), digital asset exchanges, and stablecoin issuers.
- South African banks and financial institutions are integrating cryptocurrencies within conventional finance, fostering a more institutional approach compared to the retail- and remittance-driven market in Nigeria.
- The South African Financial Sector Conduct Authority (FSCA) has been actively issuing cryptocurrency licenses, with over 63 approvals recorded in Q2 2024.
- Binance has blocked Nigerian users from accessing free token rewards and airdrops, while the South African Revenue Service (SARS) has launched a specialized crypto tax unit, taxing income from crypto mining and airdrops at 45%.
