The Central Bank of Nigeria (CBN), led by Governor Olayemi Cardoso, formally opened applications on August 12 for the second cohort of its Regulatory Sandbox Programme, including a new Virtual Asset Service Provider (VASP) track that allows crypto payment companies to test products under live regulatory supervision. The application window runs through August 31 via the CBN's sandbox portal at sandbox.cbn.gov.ng. The move is a direct follow-through on a Presidential Executive Order signed last month and marks a significant shift in how Nigeria, which ranked second globally on the Chainalysis Crypto Adoption Index in 2024 and sixth in 2025, governs digital assets.

The sandbox includes two tracks. The VASP track covers stablecoins, payments, settlement, custody, wallet management, and transaction infrastructure. A second track, focused on data-enabled financial services and secure digital infrastructure, is aimed at fintech innovations that involve permission-based data sharing but do not qualify as virtual asset activity. The CBN described the sandbox as "a controlled environment in which eligible participants may test innovative financial products, services, business models, and enabling technologies." The framework had already seen informal pre-launch testing: Flutterwave, Paystack, and the payments startup Juiceyway informally piloted the framework in March 2026 ahead of the public cohort launch.

The sandbox sits within a broader regulatory restructuring that has been moving quickly. A federal government virtual assets white paper published in February 2026 established the policy foundation. On July 17, President Bola Tinubu signed the Presidential Executive Order on Virtual Assets Coordination, issued under Section 5 of Nigeria's Constitution, establishing the Virtual Asset Regulatory Council (VARC), which the government has described as Africa's first cross-sectoral coordination framework for crypto regulation. The council is chaired by the CBN, with the Securities and Exchange Commission (SEC) and the Nigeria Revenue Service (NRS) serving as vice-chairs. The Nigerian Financial Intelligence Unit and the Office of the National Security Adviser hold seats as well. A Virtual Asset Office housed at the CBN serves as the council's day-to-day secretariat. VARC held its first coordination meeting on July 29, 2026, just two weeks before the sandbox opened, underscoring the pace of implementation between the Executive Order and the CBN's sandbox timeline. Critically, the order does not consolidate regulatory authority into a single body. Each agency keeps its existing mandate. The State House framed the goal as the ability to "close these gaps through supervisory coordination, without introducing new layers of regulation."

The jurisdictional lines are now explicit. The CBN governs virtual assets used for payments, including stablecoins, custody, and settlement infrastructure. The SEC governs digital assets that function like investment securities, a category formally codified under the Investments and Securities Act 2025. For founders building in Nigeria, this split removes a long-standing ambiguity. A wallet provider goes to the CBN. A token with investment characteristics goes to the SEC. The SEC has also been active on its side: in July 2026, its Accelerated Regulatory Incubation Program (ARIP) admitted nine digital asset investment companies, and the first public digital securities offering on the NASD Digital Securities Platform is expected in September 2026.

The stakes are substantial. Nigeria received $92.1 billion in total on-chain value between July 2024 and June 2025 and accounts for roughly 45 percent of Sub-Saharan Africa's on-chain transaction volume, according to Chainalysis. That figure covers all on-chain activity, including the peer-to-peer channels that dominate Nigeria's crypto economy. A separate estimate from Aiying, which excludes P2P and over-the-counter trades, placed virtual asset trading volume for the same period at approximately $921 million. The gap between the two figures reflects how much of Nigeria's crypto activity flows through informal channels, and formalising those flows is a central aim of the sandbox and the broader licensing regime. Stablecoin volumes ran to approximately $22 billion in the 12 months ending June 2024. By 2025, stablecoins accounted for roughly 43 percent of retail crypto activity in the country. Nigeria has more than 22 million crypto users and is projected to reach 28.7 million by the end of 2026. Much of this volume flows through peer-to-peer channels, a direct legacy of the CBN's 2021 ban on banks facilitating crypto transactions. That ban was reversed in December 2023, when the CBN issued guidelines allowing licensed VASPs to access banking rails. With Nigeria receiving approximately $20 billion in remittances in 2023, the stablecoin sandbox track carries direct implications for cross-border payments, not only domestic crypto activity. The sandbox now creates a formal supervised pathway for companies seeking that recognition.

Regionally, Nigeria is moving to close a regulatory gap that competitors had been widening. South Africa has operated a licensed crypto regime since 2023. Kenya signed crypto legislation in October 2025. Ghana passed its VASP Act in December 2025 and its sandbox is already admitting international firms. A BusinessDay analysis warned that those jurisdictions risked attracting crypto capital and talent away from Nigeria. One area to watch is the NRS's forthcoming tax framework for virtual assets, which will carry implications for on-chain businesses and decentralized finance protocols operating in the country.

The Harmonised Implementation Framework that VARC is required to produce was due within 30 days of the July 17 Executive Order, putting the deadline in mid-August. Whether that framework arrives alongside the sandbox cohort or shortly after will signal how coordinated the rollout actually is. With the application window closing August 31, the selection and review process that follows will determine how quickly Africa's largest economy produces its first formally regulated VASP cohort.