Senate Calls for Stronger Fintech Regulation and Anti-Ponzi Measures
The Nigerian Senate has emphasized the need for a more robust regulatory framework to oversee the rapidly expanding fintech sector. This initiative places the Central Bank of Nigeria (CBN) at the core of coordination, while also urging stricter actions against the increasing prevalence of Ponzi schemes in the country.
This position was presented by Senator Mukhail Adetokunbo Abiru, the Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, during a one-day public hearing held at the National Assembly in Abuja. The event focused on the Banks and Other Financial Institutions Act (Amendment) Bill 2025 (SB. 959), as well as an investigation into the operations of Ponzi schemes, with a specific focus on the recent Crypto Bullion Exchange (CBEX) incident.
The hearing was organized jointly by several Senate committees, including those on Banking, Information and Communication Technology (ICT) and Cyber Security, Capital Market, and Anti-Corruption and Financial Crimes. It aimed to enhance Nigeria’s financial regulatory architecture amid rapid digital transformation and the rise in financial fraud.
Senator Abiru, who is a retired bank chief, accomplished economist, and accountant, stressed the importance of strengthening the current legal framework under the Banks and Other Financial Institutions Act (BOFIA). He specifically called for fintechs to be placed under the supervisory authority of the CBN.
According to him, the proposed bill seeks to amend the BOFIA 2020 to establish a clear statutory framework for the designation, registration, and enhanced supervision of Systemically Important Institutions, particularly technology-enabled financial service providers.
Over the past decade, Nigeria’s financial ecosystem has undergone significant transformation. Fintechs, including mobile money operators, payment platforms, digital lenders, and settlement companies, now serve millions of Nigerians, process vast transaction volumes, and handle sensitive financial data. While their growth has improved financial inclusion, the existing laws have not kept pace with their scale and systemic relevance.
Although the CBN currently designates Systemically Important Financial Institutions, the framework remains largely bank-focused and does not fully address the realities of large, data-driven, non-bank financial platforms. This creates a regulatory gap that affects financial stability, data sovereignty, consumer protection, and national security.
The proposed amendment includes the following key elements:
- Empower the CBN to designate qualifying fintechs and digital financial institutions as Systemically Important Institutions.
- Establish a national registry to improve transparency and beneficial ownership disclosure.
- Strengthen risk-based supervision tailored to technology-driven financial services.
- Promote data sovereignty and systemic stability.
‘The question has arisen as to whether the creation of a new standalone regulatory agency would be a preferable pathway for supervising fintechs,’ Abiru said. ‘However, after careful consideration, it is evident that establishing an entirely new agency would duplicate functions, create bureaucratic overlap, increase administrative costs, and fragment regulatory authority in a sector where coordination and coherence are essential.’
He emphasized that fintech regulation is closely linked to monetary policy, payments oversight, prudential supervision, Know-Your-Customer (KYC) and Anti-Money Laundering (AML) enforcement, and systemic risk monitoring functions that already reside within the CBN.
‘It is far more effective to strengthen the BOFIA framework, modernise CBN supervisory powers, and mandate robust coordination with agencies such as the Securities and Exchange Commission, Nigerian Communications Commission, National Information Technology Development Agency, Corporate Affairs Commission, Federal Competition and Consumer Protection Commission, Office of the National Security Adviser and the Federal Ministry of Finance,’ he said.
He added that incorporating fintech regulation into BOFIA would prevent the emergence of regulatory silos and ensure that digital financial services remain fully integrated with the broader banking ecosystem.
Addressing the Threat of Ponzi Schemes
Beyond fintech regulation, the Senate intensified its scrutiny of Ponzi schemes and fraudulent digital investment platforms during the hearing.
Senator Abiru described their growing prevalence as a serious threat to financial stability and public confidence, citing the recent CBEX incident, which reportedly caused significant losses to many Nigerians, including young professionals, retirees, traders, small business owners, and students.
He warned that such schemes not only inflict individual hardship but also undermine trust in legitimate financial institutions, distort capital allocation, damage Nigeria’s financial reputation, and heighten risks of money laundering and illicit financial flows.
