In a surprising move, the Federal Government of Nigeria has lifted the ban on cryptocurrency and introduced taxation on digital assets. This decision marks a significant shift in the government’s stance on cryptocurrencies, which were previously met with strict regulations.The ban, initially imposed by the Central Bank of Nigeria (CBN) in February 2021, had prohibited financial institutions from engaging in cryptocurrency transactions and closed accounts associated with such activities. The CBN cited concerns over money laundering, terrorism financing, cybercrime, and the volatile nature of cryptocurrencies as reasons for the ban.However, the ban received widespread criticism from the public and the cryptocurrency community, who argued that it hindered technological progress and economic growth. Recognizing the growing adoption and economic significance of digital assets, the government has now opted for taxation as a means to harness the potential revenue generation from cryptocurrencies.The journey leading to this decision has seen several significant events unfold. Various stakeholders, including the CBN, Securities and Exchange Commission (SEC), and the Nigerian Senate, engaged in discussions and investigations to explore the opportunities and threats posed by cryptocurrencies to Nigeria’s economy and security.In a series of developments, the CBN clarified its position on the ban, stating that individuals were not prohibited from buying or trading cryptocurrencies, albeit not through Nigerian banks or fintech platforms. The SEC also recognized digital assets as securities and issued regulations governing cryptocurrency exchange and custody.The introduction of taxation on cryptocurrencies aligns Nigeria with other jurisdictions worldwide that have implemented similar measures. Countries such as the United Kingdom, the United States, Australia, India, Kenya, and South Africa have already established taxation frameworks for digital assets.Under the new law, which was signed into effect on May 28, 2023, gains from the disposal of digital assets, including cryptocurrency, will be subject to a 10 percent tax. This move aims to capitalize on the economic potential of digital assets while ensuring compliance with taxation regulations.As Nigeria takes this bold step, the government seeks to strike a balance between embracing the benefits of cryptocurrencies and safeguarding against illicit activities. The implementation of taxation represents a significant milestone in the country’s evolving regulatory landscape, providing a framework for the taxation and regulation of digital assets in Nigeria.