Nigeria's fintech boom is exposing gaps between financial innovation and regulation, as digital assets, payments, identity systems and embedded finance converge across regulatory boundaries.
ITWeb Africa interviewed fintech and financial crime experts, who pointed to uncertainty around stablecoins, compliance costs, identity fraud and coordination among regulators.
Raj Kamal, founder and chief executive officer of TransFi, said the biggest regulatory gap is the use of stablecoins for payments.
Businesses use digital dollars to pay overseas suppliers and receive export earnings, he said, while the rules treat digital assets as investments.
Kamal said the Investments and Securities Act 2025 places digital assets under the Securities and Exchange Commission, while payments and foreign exchange fall under the Central Bank of Nigeria (CBN), leaving stablecoin transactions caught between both regulatory frameworks.
He called for clearer rules on stablecoin payments, including whether a temporary transfer constitutes holding a digital asset and which regulator should oversee the transaction.
A CBN survey published in February found that 87.5% of fintechs said compliance costs significantly affect their ability to innovate, while 37.5% said launching a new product takes more than a year.
Christian Jacob, a financial crime and artificial intelligence (AI) governance specialist, highlighted identity fraud.
He said stronger Bank Verification Number and National Identification Number checks have made fabricated identities easier to detect, but criminals are increasingly using genuine identities to create or supply accounts.
Jacob said fintechs may need controls including facial matching and liveness detection, while ensuring those systems can withstand AI-enabled attacks.
He called for stronger regulatory coordination, proposing mutual recognition through the CBN's proposed Single Regulatory Window to reduce duplicate submissions and compliance burdens for fintechs.
Ryan Kirkley, co-founder and chief executive officer of Global Settlement Network, a US-based blockchain infrastructure company, told ITWeb Africa that regulation must address transactions crossing payments, digital assets, banking infrastructure and cross-border settlement.
Kirkley said Nigeria has established regulatory frameworks, including pathways for virtual asset service providers, but uncertainty remains where regulated digital assets connect with banking and payment systems.
He said regulation should focus on interoperability, data governance, digital identity, custody, transaction monitoring and accountability for automated financial activity.
ITWeb Africa reported in June that the International Monetary Fund had urged Nigeria to bring stablecoins under formal oversight.
In August, it reported that the CBN had opened a second regulatory sandbox cohort with a dedicated track for virtual asset service provider solutions, covering stablecoin, payment, settlement and custody infrastructure.
The interviews suggest Nigeria's regulatory framework is expanding, but its effectiveness will increasingly depend on how regulators coordinate as fintech products become more interconnected.
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