The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have introduced a wave of regulatory measures that are drawing both praise and sharp criticism from fintech operators, as the compliance burden on digital financial services firms continues to mount.
Industry experts interviewed by Nairametrics expressed divergent views on the new frameworks, which cover capital requirements for digital asset operators, mandatory disclosure of Ultimate Beneficial Owners (UBOs), and data localization rules for payment transaction data.
**SEC raises capital thresholds for digital asset firms**
Earlier this year, SEC issued a circular mandating higher minimum capital requirements for digital asset operators, with compliance deadlines set for 2027. Digital Asset Exchanges (DAXs) must increase their minimum capital from **N500 million to N2 billion** by June 2027. Digital Asset Custodians face the same N2 billion minimum, while Digital Asset Offering Platforms and Real-World Asset Tokenization and Offering Platforms must hold at least N1 billion each.
Smaller operators face thresholds of N500 million for Digital Asset Platform Operators and Digital Asset Intermediaries, and N300 million for Ancillary Virtual Asset Service Providers.
**CBN tightens ownership transparency and data rules**
The CBN has also issued a June 2026 circular requiring financial institutions — including deposit money banks, payment service providers, and mobile money operators — to identify, verify, and disclose their UBOs. Firms must reveal the natural persons who ultimately own or control their businesses, even where ownership is masked through offshore holding structures, investment funds, or trusts.
In a parallel move, the apex bank has directed all regulated entities to store payment transaction data generated in Nigeria on local servers, with full compliance required by January 1, 2027. The data localization policy is designed to improve regulatory visibility and reduce operational concentration risks.
**Industry divided on impact**
Wale Ameen, founder of cross-border financial identity platform Cush, described several of the reforms as positive developments. He singled out the data localization requirement as a "brilliant policy," arguing that Africa has historically been a consumer of global technology services while its data is stored abroad. Retaining data domestically could strengthen local digital infrastructure and position the continent more strategically in the AI era, he said.
However, Femi Adegolu, co-founder of Tradepal AI, criticised the SEC's higher capital requirements for digital asset exchanges, calling them a "capital death sentence" for early-stage technology startups. He warned that forcing startups to lock up large sums before achieving product-market fit would favour large foreign players while pushing indigenous innovators toward unlicensed, invisible channels with zero accountability.
"If it costs a fortune to be transparent, then invisibility becomes the only viable business model for the next generation of Nigerian founders," Adegolu said. He argued that accessible compliance infrastructure, not high capital requirements, creates safer financial markets.
DevOps engineer Akande Adedayo acknowledged that CBN's anti-fraud and data protection goals are commendable but warned that the implementation costs are significant. Institutions must now invest in servers, hire dedicated network and security personnel, ensure continuous power supply, and comply with privacy regulations — a financial burden that could strain fintechs unable to absorb such costs.
**What it means for fintech compliance**
For fintech firms that have raised international venture capital through complex offshore structures — often registered in the US, UK, Singapore, Mauritius, or the Netherlands — the UBO disclosure requirement may prove particularly challenging. The CBN's intensified focus on ownership transparency and systemic importance signals that regulators are preparing for a future where fintechs play an even larger role in Nigeria's financial system.
As the debate continues over where to strike the balance between fostering innovation and protecting financial system integrity, fintech operators face a clear trajectory: compliance obligations are expanding, and the cost of meeting them is rising.
