In a striking divergence of policy, the world’s two largest democracies, India and Nigeria, are charting fundamentally different courses for the future of digital assets. While India is using taxation and a state-backed digital rupee to maintain tight control, Nigeria is opting to bring cryptocurrencies into the fold of its existing securities laws.
India’s Path: Control Through Taxation and a Sovereign Digital Rupee
India’s strategy is not one of outright prohibition but of heavy-handed discouragement through fiscal policy and the promotion of its own central bank digital currency (CBDC).
The government’s stance was clearly articulated by Union Minister Piyush Goyal, who stated that while there is no ban on cryptocurrencies that lack sovereign backing, the government is “taxing it very heavily” because it doesn’t want citizens to be stuck with assets that have no backing. This is implemented through a stringent tax regime: a flat 30% tax on all income from virtual digital assets, a 1% Tax Deducted at Source (TDS) on transactions above a threshold, and an 18% GST on fees charged by crypto platforms. This multi-layered approach significantly raises the cost of trading and investing in private cryptocurrencies.
Concurrently, India is advancing its own digital rupee, backed by the Reserve Bank of India (RBI). Minister Goyal has highlighted that this digital currency is designed to make transactions easier and faster than the traditional banking system, while also providing the government with full traceability. This move aims to offer a state-guaranteed alternative to private digital assets.
Nigeria’s Path: Integration Through Regulation and Licensing
In contrast, Nigeria has chosen a path of regulatory integration, formally recognizing the crypto ecosystem and establishing clear rules for its operation.
The landmark Investments and Securities Act (ISA) 2025 has redefined the landscape by explicitly classifying digital assets as securities, placing them under the regulatory authority of the Nigerian Securities and Exchange Commission (SEC). This law provides the long-awaited statutory clarity needed for the market to mature under official oversight. The Act establishes a comprehensive licensing and compliance framework, requiring all crypto exchanges and Virtual Asset Service Providers (VASPs) to register with the SEC and adhere to strict investor protection and anti-money laundering standards.
This represents a significant shift from the previous environment of restriction. The Central Bank of Nigeria (CBN), which had once prohibited financial institutions from dealing with crypto entities, has now reversed its stance. It permits banks to provide services to crypto firms that are properly licensed by the SEC, bringing these activities into the formal financial system.
Implications for the Market
For treasurers and funds, these divergent paths create distinct operational landscapes. Engaging with the Indian market requires pricing in the high cost of its tax structure and navigating an environment designed to favor the upcoming digital rupee. The Nigerian market, meanwhile, offers legal clarity and a defined licensing path, but demands full compliance with securities regulations, transforming regulatory uncertainty into a more manageable licensing risk.
The world is watching these two democratic giants as they conduct a real-time experiment on how to manage the disruptive force of digital assets. Their successes and challenges will undoubtedly inform the policies of many other nations in the years to come.
