Answer ... There is no generally applicable framework regulating the use of blockchain in Nigeria. Nevertheless, the commitments expressed in the National Blockchain Adoption Strategy (the Strategy) and the National Blockchain Policy (the Policy) should be considered by developers.

In addition, developers must keep in mind the provisions of the Nigeria Data Protection Regulation (NDPR) and the NDPR Implementation Framework (together, ‘the data protection laws’). The data protection laws are administered by the Nigeria Data Protection Bureau (NDPB) and apply to:

• all transactions involving the processing of personal data in respect of natural persons in Nigeria;
• natural persons residing in Nigeria; and
• non-resident Nigerians.

Where the blockchain protocol is to be implemented in a regulated sector, such as financial services or insurance, the developers will need to consider the extent to which the regulatory framework of that sector will apply to the proposed implementation. Accordingly, developers are advised to seek legal advice to determine whether:

• the blockchain falls within the ambit of the applicable laws; and
• approval or ‘no objection’ will be required from the relevant regulator.

For instance, the Central Bank of Nigeria (CBN), the apex financial regulator in Nigeria:

• has prohibited the institutions that it regulates (i.e., deposit money banks, non-bank financial institutions and other financial institutions) from dealing in or facilitating payment for cryptocurrencies; and
• has directed such institutions to identify and close the accounts of individuals and entities dealing in cryptocurrencies.

The above stance of the CBN is what is generally referred to as the ‘crypto ban’. However, it is important to note that the “crypto ban” is not a general prohibition on the use of blockchain for regulated activities outside of cryptocurrency nor a ban on the use of cryptocurrencies save for as relates to the activities of institutions regulated by the CBN.

Conversely, the Securities and Exchange Commission (SEC), the apex regulator for securities and investment in Nigeria, has, through its Rules on Issuance, Offering, and Custody of Digital Assets (‘Digital Asset Rules’) issued in May 2022, created a framework for regulating/registering virtual and digital assets, covering:

• the issuance of digital assets as securities;
• initial coin offerings (ICOs);
• custodial services; and
• digital assets exchanges.

If the blockchain falls within this framework, SEC regulatory/registration framework should be considered.

Notwithstanding the above, per the Policy, the Federal Government has committed to creating sandboxes where blockchain startups can test their innovative ideas without being subject to stringent regulations. This will allow for more experimentation and innovation in the industry.

Anti-money laundering and know-your-customer regulations may also apply to blockchains. For example, the Special Control Unit against Money Laundering is a department under the Economic and Financial Crimes Commission charged with responsibility for registering, monitoring and supervising the activities of designated non-financial businesses and professions.

Another consideration is obtaining, protecting and exploiting IP rights, as well as avoiding infringement of existing IP rights. Please see question 7 for further details.

Answer ... There are no significant differences in the considerations or issues between public and private blockchain; if the blockchain is being used for a regulated activity, this should not affect its regulatory treatment.

Nevertheless, a private blockchain is more likely to satisfy the data protection laws (eg, the right to erasure) than a public blockchain.

Answer ... As a result of the “crypto ban” (see question 1.1), the use of blockchain applications involving cryptocurrencies places accounts at risk of closure. Additionally, the protections that are typically afforded to customers of regulated institutions will not apply in the event of any loss, as the CBN has consistently maintained that persons dealing in cryptocurrencies do so at their own risk. This notwithstanding, in case of loss, users should still engage legal counsel to determine their legal options, particularly in cases where fraud or negligence are contributing factors to the loss.

Users, in relation to non-cryptocurrency use cases, should also be cognisant of any applicable sectoral regulations and ensure that relevant approvals have been obtained.

Users should further note that due to the immutable nature of the blockchain, it may be difficult to reverse completed transactions/additions to the blockchain.

Answer ... Where the blockchain is utilised in the provision of regulated activities, the following regulators have the power to license and issue applicable regulations:

• the CBN, where the blockchain is used for banking and other financial services;
• the SEC, where the blockchain is used for the capital markets, securities and investment or similar;
• the National Insurance Commission (‘NAICOM’), where the blockchain is used for insurance business; and
• the Nigerian Communications Commission, where the blockchain leverages mobile telephone technology.

In addition, the following regulators have general regulatory oversight:

• the National Information Technology Development Agency (NITDA);
• the NDPB; and
• the Federal Competition and Consumer Protection Commission (FCCPC).

Moreover, the Nigerian courts are empowered to settle any dispute arising from the use of any blockchain.

Answer ... There is no single general approach, as the approach adopted by each regulator is evolving and different. However, the regulators appear to view all virtual assets, virtual currencies and crypto assets/cryptocurrencies in the same light. As such, reference to ‘cryptocurrencies’ includes all of the above.

The regulators have expressed both pro-cryptocurrency and anti-cryptocurrency approach over the years.

For instance, prior to the “crypto ban” (see question 1.1), which has effectively ensured that no cryptocurrency platform can have access to the fiat banking and payment system, the CBN had issued warnings to the public about the use of cryptocurrencies. Similarly, in 2017, the SEC advised the public to exercise extreme caution regarding cryptocurrencies; and in November 2022, the director general of the SEC remarked that the Digital Asset Rules will not apply to cryptocurrencies.

Conversely, in 2017, a committee was formed by the CBN and the National Deposit Insurance Corporation to explore the viability of regulating and accepting virtual currencies. In 2021, the Nigerian government became one of the earliest issuers of a central bank-issued digital currency (CBDC). In 2022, the CBN released the Payment System Vision 2025 (PSV25), which explicitly stated that the CBN would consider the development of a regulatory framework for the potential implementation of stablecoins. Similarly, a SEC Fintech Roadmap Committee report of 2019 recommended, among other things, that the SEC:

• work with other regulatory agencies to establish clear and specific licensing regimes for different fintech businesses in Nigeria; and
• include blockchain and coin exchanges among its key areas of focus.

In September 2020, the SEC released the Statement on Digital Assets and their Classification and Treatment (the ‘SEC Statement’), by which it sought to regulate digital assets; but it subsequently stepped back as a result of the “crypto ban”. In May 2022, the SEC released the Digital Asset Rules. Informal confirmations from within the SEC is that the Digital Asset Rules will apply to cryptocurrencies notwithstanding the earlier-referenced statement of the director general of the SEC.

Accordingly, both the CBN and the SEC have expressed both pro-cryptocurrency and anti-cryptocurrency stances. The current stance of the CBN is the crypto ban and the current stance of the SEC is to regulate cryptocurrencies under the Digital Asset Rules.

In 2018, a motion requiring regulators to look into the regulation of cryptocurrencies was moved. Similarly, the Finance Bill of 2022 and the Investments and Securities Act (Amendment) Bill include provisions targeting cryptocurrencies.

Beyond cryptocurrencies, the Nigerian regulators have taken an exploratory approach towards blockchain. In 2019, the CBN requested public submissions on the use of distributed ledger technologies for fiat currencies. Similarly, NITDA has introduced and finalised the Strategy (see question 2.2) and the Policy received Federal Government approval in May 2023, with the Federal Government urging relevant regulatory bodies to develop regulatory instruments for the deployment of Blockchain Technology across various sectors of the economy – it is therefore expected that we will see the introduction of sector specific Blockchain Technology regulations, policies or guidance notes within the coming year. Nigeria has also joined the list of nations with a CBDC with the introduction of the eNaira (see question 3.1).

Answer ...

• The Blockchain Nigeria User Group;
• The Stakeholders in Blockchain Association of Nigeria;
• The Fintech Association of Nigeria; and
• The Nigeria Blockchain Consortium.

Answer ... Despite the “crypto ban” (see question 1.1), cryptocurrencies have enjoyed widespread adoption by the public, particularly as a store of value and as an investment vehicle. With rising inflation and fears of currency devaluation, the Nigerian public is increasingly turning to cryptocurrencies. A 2022 Kucoin report estimated that over 35% of Nigerian adults are crypto investors. However, it appears that interest in cryptocurrency as a hedging solution has waned following the bear market of 2022.

A 2019 survey by the Blockchain Nigeria User Group also reported various other use cases explored by Nigerian blockchain startups, including:

• news/media/publicity;
• lending;
• security;
• supply chain;
• wallet services;
• event organising;
• formal education/certification;
• royalty/rewards;
• social impact;
• social network;
• consulting;
• real estate; and
• venture capital.

Answer ... In January 2023, NITDA published the Strategy. According to the Strategy, potential use cases of blockchain in government include:

• national identity management;
• healthcare;
• internal revenue monitoring;
• voting;
• secure financial services; and
• registries.

The Strategy, in particular, refers to the use of blockchain for national identity management. The Strategy notes that Nigeria has been slow in adopting blockchain for the deployment of government services and aims to reverse this trend. In particular, its vision is to use blockchain technology as a platform for the transition to a digital economy. Similarly, per the Policy, the Federal Government has set out a comprehensive framework for blockchain acceptance and execution in Nigeria particularly with respect to financial services and government and corporate digital services. Interestingly, in contrast to the CBN’s stance, the Policy recognized cryptocurrencies as a component that will catalyse the adoption of blockchain technology and commits to providing a framework which can help mitigate risks such as money laundering and fraud.

Blockchain as a tool for record-keeping is also growing in adoption. Indeed:

• the Federal Inland Revenue Service has expressed its desire to adopt blockchain technology in its tax-related record-keeping activities;
• the NITDA has also expressed an intention to deploy blockchain in identity management and;
• the Nigerian Exchange Group has announced the planned deployment of blockchain in its offerings.

Answer ... The financial services industry in particular, has been investing in the blockchain space to the extent permitted by the extant regulations.

Similarly, the supply chain management industry is making headway in the blockchain space, with major participants such as Shell reporting the use and adoption of blockchain technology in their offerings.

Answer ... Per the Strategy (see question 2.2), the NITDA has, among other commitments, expressed the following crucial initiatives for the adoption of blockchain:

• the establishment of the Nigeria Blockchain Consortium;
• the creation of blockchain business incentive programmes; and
• the establishment of a national blockchain sandbox for proof of concepts and pilot implementation.

While these commitments were only finalised in January 2023, we are mindful that the NITDA had expressed a commitment to them as far back as 2020. However, three months after finalisation, no concrete progress had been recorded. Similarly, despite widespread publicity about the NITDA Blockchain Scholarship Programme, which aimed to train 30,000 Nigerians on blockchain technology and was scheduled to commence in December 2022, there has been no indication that the programme has in fact commenced.

Similarly, earlier government calls/commitments to incentivise blockchain development have not been very fruitful. Nevertheless, there are various private initiatives/programmes available, including:

• the Zuri Training Programme;
• the ALX Software Engineering Programme;
• the Bitcoin Talents Programme;
• KVCH Blockchain Academy; and
• the Blockchain and FutureTech Conference.

Answer ... The CBN has continued to maintain that cryptocurrencies are not legal tender and the “crypto ban” remains in place (see question 1.1).

Conversely, in addition to issuing the Statement which classified ‘virtual crypto-assets’ as securities except where proven otherwise by their issuer or sponsor, and therefore subject to the regulatory remit of the SEC pursuant to the Investments and Securities Act of 2007, the SEC had gone further to issue the Digital Asset Rules which altogether give the impression of a willingness and readiness to regulate cryptocurrencies.

The SEC Statement defines a ‘crypto-asset’ as:

a digital representation of value that can be digitally traded and functions as (1) a medium of exchange; and/or (2) a unit of account; and/or (3) a store of value, but does not have legal tender status in any jurisdiction.

It further states that a crypto-asset is “neither issued nor guaranteed by any jurisdiction, and fulfils the above functions only by agreement within the community of users of the Crypto Asset; and Distinguished from Fiat Currency and E-money”.

The SEC statement initially provided that it would treat virtual assets/instruments as indicated in the table below.

The SEC has since clarified its position with the issuance of the Digital Asset Rules, which distinguish between digital assets and virtual assets. Under the Digital Asset Rules:

• ‘digital asset’ means a digital token that represents assets such as a debt or equity claim on the issuer; and
• ‘virtual asset’ means a digital representation of value that can be transferred, digitally traded, and can be used for payment or investment purposes; it does not include a digital representation of fiat currencies, securities or other financial assets.

The Digital Asset Rules further provide for the regulation of entities operating in the digital/virtual asset ecosystem. Divided into five parts, the rules cover the following:

• Part A: Rules on issuance of digital assets as securities;
• Part B: Rules on registration of digital asset offering platforms;
• Part C: Rules on registration of digital asset custodians;
• Part D: Rules on virtual asset service providers (VASPs); and
• Part E: Rules on digital asset exchanges (DAXs).

The Digital Asset Rules provide that prior to an initial digital asset offering in Nigeria or targeting Nigerians, the promoters/issuers must make an initial assessment filing, including a legal opinion indicating whether the digital assets involved are securities. If the SEC determines that the digital assets qualify as securities, the Digital Asset Rules require prior registration with the SEC before the digital assets can be issued. The procedure for application for the registration of a digital asset requires:

• a registration statement;
• know-your-customer (KYC) procedures, disaster recovery plans and a risk management protocol;
• security protocols (including platform architecture and technology);
• a solicitor’s opinion confirming that all applicable permits and licences for the issuance and transfer of the securities after the offer have been obtained;
• a copy of the escrow agreement with an independent custodian or trustee registered with the SEC;
• corporate governance disclosures;
• evidence of payment of the applicable fees; and
• any other information to be determined by the SEC from time to time.

However, the Digital Asset Rules exempt the following digital assets from registration:

• securities structured to be exclusively offered through crowdfunding portals or intermediaries;
• securities involved in a judicial sale or sale by an executor, administrator or receiver in insolvency or bankruptcy;
• where the sale is by a pledged holder or mortgagee, a sale to liquidate a bona fide debt and not for the purposes of avoiding the provision of the Digital Asset Rules; and
• an isolated transaction in which any digital token is sold for the owner’s account and where the sale or offer for sale is not made during repeated and successive transactions by the owner.

In addition to the registration framework set out above, there is an implicit no-objection framework for all digital and virtual assets. This is because the Digital Asset Rules prohibit DAX operators from facilitating the trading of any virtual/digital asset unless the SEC has issued ‘no objection’ to the trading of the asset.

Nigeria has also joined other nations in introducing a CBDC, the eNaira. The eNaira:

• is issued by the CBN as legal tender;
• forms part of the currency in circulation; and
• is at par with the physical naira.

In October 2021, the CBN issued the Regulatory Guidelines on the eNaira (the ‘Regulatory Guidelines’), which define ‘eNaira’ as the electronic naira issued by the CBN as a legal tender. eNaira is further described as follows:

• the digital form of the fiat currency (naira), issued by the CBN pursuant to the Central Bank of Nigeria Act of 2020;
• a direct liability of the CBN;
• legal tender that forms part of the currency in circulation and is at par with the physical naira; and
• a CBDC that is exchangeable for other CBDCs.

Answer ... All cryptocurrencies that qualify as digital assets or virtual assets under the Digital Asset Rules are subject to the anti-money laundering regimes applicable in Nigeria, including:

• the Money Laundering (Prevention and Prohibition) Act;
• the Terrorism (Prevention and Prohibition) Act, 2022;
• the Terrorism Prevention (Freezing of International Terrorists Funds and other Related Measures) Regulations, 2013; and
• the Securities and Exchange Commission (Capital Market Operators Anti-Money Laundering and Combating the Financing of Terrorism) Regulations, 2022.

Similarly, the operation of the eNaira is subject to the following regimes:

• the Money Laundering (Prevention and Prohibition) Act;
• the Terrorism (Prevention and Prohibition) Act, 2022;
• the Terrorism Prevention (Freezing of International Terrorists Funds and other Related Measures) Regulations, 2013; and
• the Central Bank of Nigeria (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions) Regulations, 2022.

The applicable anti-money laundering laws and regulations collectively operate to prevent illicit financial flows and all other kinds of frauds and financial crimes from being committed using financial and security assets, including cryptocurrencies and the eNaira. Consequently, participants in the digital asset and virtual currency space must ensure the full disclosure of stipulated information and particulars, including:

• KYC requirements;
• prudential regulations;
• corporate governance rules;
• report renditions; and
• the reporting of suspicious transactions in specified formats.

Infringement of the anti-money laundering regulations and laws attracts penalties ranging from fines and suspension or withdrawal of an operating licence to imprisonment.

Answer ... While cryptocurrencies are not yet fully regulated in Nigeria, we opine that the Federal Competition and Consumer Protection Act 2018 administered by the FCCPC should apply to cryptocurrencies, notwithstanding the stance of the CBN. However, the FCCPC has made no commitment one way or the other. Conversely, we expect that cryptocurrencies that qualify as digital assets or virtual assets under the Digital Asset Rules will enjoy the consumer protection measures under the following regimes:

• the Federal Competition and Consumer Protection Act, 2018;
• regulations, guidelines, codes and standards issued by the FCCPC on issues relating to the protection of consumers;
• the SEC’s Corporate Governance Guideline, 2020; and
• the Digital Asset Rules.

The eNaira as a CBDC will be subject to the applicable consumer protection regimes in the financial services sector, including:

• the CBN’s Consumer Protection Regulations, 2019; and
• the Regulatory Guidelines.

Specifically, complaints by consumers/end users arising from the use of the eNaira should be referred to the end user’s preferred financial institution helpdesk. If unresolved, such consumer complaints should be escalated to the eNaira Helpdesk. Similarly, complaints from financial institutions or disputes arising between financial institutions should be reported to the eNaira Helpdesk team and resolved within two working days. In cases of disputes where one or both parties are unsatisfied with the resolution, the issue will be referred to an arbitration panel, as provided under the Arbitration and Conciliation Act or as may be defined by the CBN from time to time.

Answer ... Although the Finance Act of 2019 and the Significant Economic Presence Order of 2020 have expanded taxation of the digital economy in Nigeria, the tax rules applicable to cryptocurrencies remain unclear. Nevertheless, the Finance Bill 2022 inserted ‘digital assets’ into the definition of ‘chargeable assets’ for the purposes of capital gains tax (CGT). The explanation note stipulates that the inclusion was made to clarify the basis for the taxation of cryptocurrencies and other digital assets in line with the government’s policy thrust of enhancing the cross-border and international taxation of e-commerce in emerging markets. Similarly, depending on how investment/trading in cryptocurrencies assets is done, income tax may be payable in place of CGT. Specifically, it is likely that the regulators will treat active trading in cryptocurrencies (as a source of income) as liable to income tax; whereas the mere disposal of cryptocurrencies (on an individual/one-off basis) will only attract CGT. In addition, if the disposal of cryptocurrencies qualifies as the supply of goods or if the provision of services along the transaction value chain constitutes the supply of services, value added tax will apply. In any case, we expect that upon passage of the bill into law and the introduction of other substantive legislative provisions, the Federal Inland Revenue Service will publish specific guidelines in this regard. Until this is done, issuers and holders of cryptocurrencies may remain unclear as to what tax rules will apply and may possibly avoid taxes that would ordinarily have been chargeable under a clearer regime.

For transactions conducted with the eNaira, all taxes that are applicable when such transactions are conducted with the physical naira will invariably apply.

Answer ... While cryptocurrency trading is restricted, the SEC’s Digital Asset Rules set out the regulatory framework for governing the trading and exchange of digital and virtual assets. The Digital Asset Rules define a ‘DAX’ as an electronic platform that facilitates the trading of a virtual asset or digital asset; and a ‘DAX operator’ as a person who operates a DAX.

The Digital Asset Rules require a person seeking to register as a DAX operator to comply with the general requirements for VASPs, in addition to meeting the following conditions:

• The application must be made on the prescribed SEC form and accompanied by Forms SEC 2 and 2D (sponsored individuals or compliance officers who will be the principal officers of the DAX – that is, managing directors and principal officers), and completed in duplicate.
• The following fees must be paid:
• • filing and application fee;
  • processing fee;
  • registration fee; and
  • sponsored individuals’ fee.
• Evidence must be provided of the required minimum paid-up capital of NGN 500 million (ie, bank balances, fixed assets or investment in quoted securities), subject to verification of the sources of the funds.
• The applicant must have a current fidelity bond covering at least 25% of the minimum paid-up capital as stipulated by the SEC’s Rules and Regulations.
• All funds must be paid through real-time gross settlement.
• The applicant must provide sworn undertakings by a director or the company secretary to:
• • keep proper records and render returns (as the SEC may specify from time to time); and
  • abide by the SEC Rules and Regulations and the Investments and Securities Act.
• A copy of each of the following, duly certified by the Corporate Affairs Commission (CAC), must be provided:
• • the certificate of incorporation (an original copy of the certificate of incorporation must be presented for sighting;
  • the memorandum and articles of association, which should include the power to perform the specified function;
  • CAC forms showing a statement of share capital, return of allotment and the particulars of directors; and
  • the latest audited accounts or audited statement of affairs of the company in the case of a new company.

In addition, before a DAX operator is permitted to commence operations, the SEC may require the following:

• evidence of IT assurance regarding system readiness; and
• a written declaration by its internal auditor confirming that it has:
• • sufficient human, financial and other resources to carry out operations;
  • adequate security measures, systems capacity, business continuity plan and procedures, risk management, data integrity and confidentiality, record keeping and audit trails for daily operations and to meet emergencies;
  • sufficient IT and technical support arrangements; and
  • a chief information security officer to ensure that cyber risks are adequately mitigated, among other things.

DAX operators are also expected to meet several obligations within the Digital Asset Rules relating to matters such as:

• corporate governance;
• reporting requirements;
• risk management; and
• trading operations requirements.

For clarity, a ‘VASP’ is defined in the Digital Asset Rules to mean any entity who conducts one or more of the following activities or operations for or on behalf of another person:

• exchange between virtual assets and fiat currencies;
• exchange between one or more forms of virtual assets;
• transfers of virtual assets;
• safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; or
• participation in and provision of financial services related to an issuer’s offer and/or sale of virtual assets.

In addition to specifying the requirements for registration as a VASP, the Digital Asset Rules impose the following obligations on VASPs:

• Monitor and ensure compliance with SEC rules;
• Ensure fair treatment of users;
• Ensure that all disclosures are accurate, clear and not misleading;
• Obtain and retain self-declared risk acknowledgement forms from users prior to them investing in an exchange;
• Provide a conspicuous disclaimer on the platform informing investors that any loss resulting from trading or investment through the exchange is not covered by any protection fund;
• Ensure that all fees and charges payable are fair, reasonable and transparent;
• Ensure that it does not engage in any business practices appearing to the SEC to be deceitful, oppressive or improper (whether unlawful or not), or which otherwise discredit its method of conducting business;
• Implement continuous awareness and education programmes;
• Have in place adequate policies, procedures and controls to mitigate against anti-money laundering, counter-terrorism financing and proliferation financing requirements, and comply with anti-money laundering/combating financing of terrorism and proliferation financing laws and regulations;
• Provide the SEC with access to the platform and any register required to be maintained under the applicable rules, and disclose such other information as may be required by the SEC from time to time; and
• Disclose and display prominently on its platform any relevant information relating to the exchange, such as:
• • warning statements on risk factors from participating on the platform;
  • information on the rights of investors relating to investing or trading on the exchange;
  • the criteria for access to the exchange;
  • education materials (including comparative information where necessary);
  • fees, charges and other expenses that may be imposed on users of the exchange;
  • information about complaints handling or dispute resolution and relevant procedures;
  • information on processes and contingency arrangement in the event that the DAX is unable to carry out its operations or cessation of business; and
  • any other information as the SEC may specify.

Answer ... As provided in the Digital Asset Rules:

• an ‘initial coin offering’ (ICO) is a distributed ledger technology capital raising involving the issuance of tokens to the general public in return for cash, cryptocurrencies or other assets; and
• a ‘securities token offering’ (STO) is any offering and sale of digital tokens that are considered securities.

See questions 3.1 and 3.5 for regulation of ICOs and STOs in Nigeria.

Answer ... Yes. Under Nigerian law, the elements of a valid contract are:

• offer;
• acceptance;
• consideration;
• intention to create a legal relationship; and
• capacity to contract.

A smart contract that meets all the above requirements will be a valid contract and will likely be treated in the same manner as electronic contracts. The validity of electronic documents is recognised under Nigerian law, and the use of electronic signatures and reliance on electronic correspondence as proof of contract are well documented.

Answer ... Yes. The PSV25 provides insight on the nature of a smart contract. It describes smart contracts as “pieces of code that are executed on a distributed ledger – where for example, the transfer of funds can be dependent on specific condition”.

However, there are no guidelines or policies specifically regulating smart contracts.

Answer ... Smart contracts are suitable to replace provisions in traditional contracts which do not necessarily require human intervention, and may be carried out without the need for any subjective judgement, such as:

• payment in instalments; or
• payment/delivery upon completion/performance.

It is thus suited to use cases such as supply chain, insurance, escrow arrangements, payment of royalties of duties etc. However, the extent of replacement will likely be limited to parameters for which information may be readily accessed on-chain or by oracles off-chain.

Answer ... Smart contracts are unlikely to replace provisions in traditional contracts which require subjective judgement (eg, determination as to quality, such as requirement to use best efforts) and parameters which may not be available online. In addition, it is unlikely that smart contracts will replace traditional contracts regarding complex commercial transactions which cannot readily be divided into ‘either/or’ connotations or which are dynamic.

Answer ... A key issue is the ability to determine whether a legal contract exists. Not all smart contracts are legal in nature and they may not contain all elements of a legally binding contracts; such smart contracts which are intended to function as legally binding contracts are typically referred to as ‘smart legal contracts’. Natural language smart legal contracts are unlikely to be a problem, as the wording will record the obligations and the court can simply implement the ordinary rules of interpretation. However, where the obligations are in the form of coded instructions, there can be a divergence between what the code is meant to indicate and what the code actually executes.

One issue which may present itself is whether smart contracts involving cryptocurrencies will be valid. Under Nigerian law, a contract – notwithstanding having all the essential elements of a valid contract – may be held invalid/unenforceable if:

• a vitiating element such as illegality is present; or
• the contract is against public policy.

Given the “”crypto ban (see question 1.1), there is a risk that the courts may deem any smart contract facilitating trading or dealing in cryptocurrencies as invalid or unenforceable. However, this risk is largely mitigated by the fact that smart contracts are self-executing and therefore do not need the court for enforcement. In Rise Vest Technologies Ltd v Central Bank of Nigeria (2021), a Nigerian court held that, notwithstanding the “crypto ban”, cryptocurrencies are not illegal as there is no extant primary legislation (except CBN circulars) prohibiting dealing in cryptocurrencies in Nigeria.

Another interesting issue is whether authentication via private keys suffices where attestation is required as a matter of law. In this regard, we note that both the Evidence Act and the Cybercrimes Act recognise the validity of electronic signatures, and the extant case laws show a liberal approach to determining what suffices as a signature. Accordingly, to the extent that private keys are private to the holder, it is unlikely that authentication via private keys will be deemed insufficient.

Answer ... In addition to the essential elements of a valid contract, careful consideration should be paid to vitiating elements of a contract and statutory form where any is required. Where a contract requires a particular form:

• that form should, as far as possible, be complied with; and
• the effect and implications of executing the smart contract should be clearly spelled out in a reader-friendly manner, particularly for users who may not be blockchain savvy.

Another crucial consideration is bugs and errors. Developers should carefully and thoroughly debug the code of the smart contract to avoid errors after deployment and to ensure that its execution is in line with the intent of the parties – not least because it may be difficult, if not outright impossible, to correct an error/bug after deployment. Similarly, developers should ensure that there is no room or minimal room for ambiguity in the terms of the smart contract as deployed. Regular testing should be done prior to and after deployment.

In addition to the smart contract itself, particular attention should be paid to the oracle and the source(s) of its off-chain information. The use of an unreliable oracle or an oracle that gets its information from disreputable sources may render a smart contract entirely useless, both to the developers and to the users who would otherwise make use of it.

Similarly, it must be acknowledged and understood that mistakes may happen and disputes may arise. Developers should incorporate a framework for rectifying or mitigating harms arising from mistakes/frauds; and a dispute resolution framework should be considered to promote transparency and drive confidence.

Finally, the International Organization for Standardization standards relevant to smart contracts should guide developers in drawing up and deploying a smart contract.

Answer ... There is no material difference in effect.

Answer ... Blockchain technology introduces a different perspective on anonymity and pseudonymity from the understanding upheld by data privacy legislation and may not squarely fall under the definitions provided by various data protection and privacy laws across the globe.

The applicability of the Nigerian data protection laws (see question 1.1) will largely depend on whether the activities in question involve the processing of personal data. Blockchain technology’s distributed peer-to-peer network architecture contrasts with the framework of centralised data controllers and processors as envisioned by the data protection laws, as the distributed architecture makes it difficult to identify controllers and processors of data on a blockchain.

For all intents and purposes, every node on a blockchain is likely to be deemed a processor, as the validation of blocks may be deemed as processing – thereby increasing the potential liability of a blockchain’s users to the data protection laws. Conversely, it can be difficult to determine the controller of data on a blockchain. It becomes complex to apply certain criteria to establish the legitimate reasons for processing personal data to blockchain use cases.

Additionally, due to the inherent leveraging of cryptographic tools, blockchains have significant potential to wrongly transmit (confidential) information to an unknown server which may be misused and mishandled. Anonymised data does not fall under the scope of protection under the Nigerian data protection laws.

Blockchain technology users may find several compliance requirements challenging, given that most data protection laws mandate data controllers and their optional data processors to implement various steps to document their programs and comply with regulatory principles and obligations such as:

• obtaining individual data subjects’ consent;
• meeting requirements for other lawful bases;
• informing data subjects of their rights and fulfilling the rights of data subjects (e.g., privacy notice, data access, rectification and portability);
• providing opportunities to object to processing, including automated decision making; and
• deleting data and maintaining data security standards which are typically risk based.

Penalties for data breaches cannot be imposed on any particular entity due to the law’s inability to identify who is the data controller or processor within the blockchain network.

There also exists the potential and risk of re-identifying blockchain users through their public or private keys. This has led more blockchains to include privacy-focused cryptocurrencies, which aim to reduce the risk of identifying individual participants.

There may also be territorial implications for distributed blockchain networks under jurisdictional legislation, as evaluating the nuances in laws between jurisdictions and applying these peculiarities to blockchain applications will be highly complicated compared to traditional centralised systems. Blockchain projects which handle personal data and attempt to limit participants by jurisdiction will face challenges because of the difficulty of confirming online locations of the blockchain users.

Blockchain networks also face inherent legal restrictions on cross-border personal data transfers as permissions are typically required ahead of such transfers and some countries do not have or maintain adequate data protection regulatory frameworks specifically and/or generally. The cross-border transfer safeguards will be hard to implement by public blockchains (in contrast with private blockchains) due to their undefined participant groups.

Answer ... Key advantages of blockchain technology in the data protection/privacy context include the following:

• Blockchain technology provides for a certain level of confidentiality of private correspondence between its users, which is a fundamental right under the Constitution.
• Blockchain technology’s high level of anonymisation generally prevents the unwanted processing of large amounts of user data which is typically collected, stored and monetised by entities.
• Blockchain records data which requires permission requests and grants by authorised users of the network only, giving users more control over their data.
• Blockchain increases trust, security and transparency of data shared across a network, which coincides with the core data protection principles across the globe.
• Blockchain utilises and prioritises de-identification techniques which aim to add a higher level of security to the data of users.
• All changes to the ledgers on the blockchain network are traceable, which provides an accurate record and increases the integrity level of data on this platform because alterations can be easily spotted, helping to prevent fraud and unauthorised activity.
• Blockchain users can only re-identify themselves with their private keys, which provides high levels of privacy.

Answer ... Blockchain technology tends to result in new cybersecurity threats which pose particular security challenges. Given that blockchain is built on established cryptographic technology features, it is often misinterpreted as a technology that is secure by design; however, these inherited cryptography attributes are ill-equipped to endure all kinds of cybersecurity threats.

Blockchain’s vulnerability to certain cybersecurity attacks is mostly due to its decentralisation and openness, which are features of blockchain that typically increase the complexity of operations and inhibit the ability to gain complete control. Thus, a thorough assessment is required to protect against cybersecurity threats and associated vulnerabilities.

Common examples of cybersecurity threats which are unique to blockchain include the following:

• Privacy breaches can occur due to the high degree of anonymity on the blockchain network, as this facilitates the plausibility of participants (intentionally or unintentionally) sharing data, which attackers can use to infer confidential or sensitive information.
• Blockchain network attackers can compromise private keys to control participants’ accounts and associated assets by using IT hacking methods or exploiting weaknesses in software, leaving virtual accounts and hot wallets of affected users vulnerable.
• Blockchains utilise consensus protocols among participants to unanimously agree when adding a new block to the chain of transactions. Due to the lack of a central authority, consensus protocol vulnerabilities may be attacked and threaten to control a blockchain network and dictate its consensus decisions from various attackers.
• Blockchain’s use of smart contracts creates another avenue for cybersecurity attacks, as any defects may be exploited by attackers to launch attacks.
• Blockchain can be used for money laundering, as the wallet identity does not usually contain personal information of the individual in possession.
• Blockchain technology can serve as a platform for illicit international trade as it permits monetary transactions by circumventing traditional regulators (eg, financial, taxation).

Answer ... Some key advantages of blockchain technology in a cybersecurity context are as follows:

• Blockchain enables transactional data to be quickly and easily processed and retrieved when needed.
• Blockchain prevents the modification of blocks (data), which helps to prevent fraud.
• Blockchain traces all transactions (illegal or not) to their origin.
• Blockchain provides a more secure and transparent way to store and transfer data.
• Blockchain can provide an immutable record of security incidents and provide information on cyber threats.
• Blockchain provides secure authentication systems for users.

Answer ... To mitigate risk, blockchain developers and users may consider the following:

• the incorporation of zero trust and secure sockets layer inspection;
• proper testing and routine evaluation of smart contracts to resolve possible defects and adhere to business and legal requirements;
• the regular updating of incident response plans;
• the development and implementation of strong data governance principles;
• the automation of security management processes;
• regular monitoring and auditing of the blockchain network; and
• a cautious approach to tests and assessments of blockchain to ensure that only permitted data is shared without exposing any private or sensitive information.

Answer ... Generally, intellectual property in Nigeria may be protected by the following instruments:

• copyright;
• patents;
• trade secrets;
• industrial designs;
• trademarks; and
• goodwill under the tort of passing off.

Ownership of intellectual property: The blockchain may be regarded as an immutable and ‘trustless’ compilation of data. While the Copyrights Act recognises compilations as being eligible for copyright protection, it is unclear whether blockchain will be eligible for this protection. Unlike traditional compilation, which is done by a specific person(s) (regarded as the author under the law), blockchain is decentralised, with multiple nodes adding/validating transaction to the chain, thereby making it virtually impossible to make a determination on authorship. Without an identified/identifiable author(s), it may be impossible to lay claim to any copyright.

Enforcement/grant of IP protection: The Central Bank of Nigeria (CBN) continues to maintain a hostile approach towards cryptocurrencies (see question 1.1). Accordingly, from a public policy perspective, it has been argued that the IP authorities and courts in Nigeria ought not to grant/enforce IP protection to cryptocurrency-related or even general blockchain-related entities. This notwithstanding that the “crypto ban” is limited in scope to regulated institutions and should not extend beyond that scope. Accordingly, it should be noted that:

• Chekkit, an authentication solution leveraging blockchain for its offerings, obtained a patent for its application in Nigeria in 2021;
• Zone, an offshoot of AppZone which is a CBN regulated institution, is a blockchain-enabled payment infrastructure company; and
• the court in Rise vest v CBN held in effect that cryptocurrencies are not illegal in Nigeria.

Consequently, it is unlikely that the IP authorities and courts will be reluctant to grant/enforce IP protection solely on the basis of the CBN’s stance.

Relevance of trade secrets and copyright: An interesting issue arises in connection with the relevance of trade secret and/or copyright protection with respect to blockchain technology itself. Blockchain technology thrives as an open-source solution which is readily available to other developers to use, adopt, propose forks and so on. Indeed, various blockchains are specifically designed to be reproduced and/or adopted by other developers – that is, as open-source platforms. Nevertheless, trade secrets, for example, may be crucial at the ideation phase of a proposed blockchain or for a proposed fork to the blockchain; and copyright protection may be relevant to the underlying code of the blockchain.

Trademark registration class: Under Nigerian law, trademarks are registered in respect of particular goods or classes of goods, using the Nice Classification. Accordingly, persons looking to register a trademark in Nigeria must register it under one or more classes of the Nice Classification. However, it is unclear which classes blockchain-related marks may be registered under. The general view appears to be that registration should be sought under the following classes:

• Class 9 (computer software);
• Class 36 (financial, monetary and banking services); and
• Class 42 (technological services; design and development of computer hardware and software).

Enforcement against blockchain: Given the decentralised and typical cross-border nature of blockchain, it may be extremely difficult to identify the court with jurisdiction and/or applicable laws where a person seeks to enforce its IP rights in relation to blockchain. For instance, following the non-fungible token (NFT) boom of early 2021, there were numerous reports of NFTs violating the IP rights of various authors residing in various parts of the world. Most of these reports were left unattended, settled between parties or brought down following notice and takedown requests sent to Open-Sea (the platform on which many NFTs were listed for sale). Indeed, it appears that protection can only be obtained by imposing intermediary liability on platforms such as Open-Sea which facilitate transactions involving such infringing content. However, it is unclear how enforcement may be carried out where there is no intermediary.

Answer ... Trade secrets: Trade secrets are a key instrument of IP protection for blockchain developers, particularly at the ideation phase. At the ideation phase, the code is still in development and in most instances no IP protection has been obtained. Nevertheless, certain information may be protected as trade secrets at the ideation phase and person(s) privy to the information may be prohibited from disclosing the same or liable to pay damages where such information is disclosed. For information to be protected as a trade secret, it must:

• be commercially valuable because it is secret;
• be known only to a limited group of persons; and
• be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.

Copyright: Developers may obtain copyright protection over the underlying code of the blockchain. To enjoy copyright under Nigerian law, the work must:

• be an eligible work (i.e., literary works, musical works, artistic works, audiovisual works, sound recordings and broadcasts);
• be original and fixated; and
• not be otherwise excluded from protection (e.g., an artistic work is not eligible for copyright if, at the time the work is made, it is intended by the author to be used as a model or pattern to be multiplied by any industrial process).

In addition, it is the expression of the work and not the idea of the work that enjoys copyright. Accordingly, subject to the above, the underlying code of the blockchain may enjoy copyright protection as a literary work. Copyright protection is automatic and requires no formal registration; however, the Nigerian Copyright Commission (NCC) has a voluntary registration system. Registration with the NCC is advisable because it:

• serves as evidence that the work is protected by copyright; and
• facilitates recording and proof of the possible date of creation of the work and other facts stated in the application form.

Additionally, a copy of the work and facts relating to the creation and ownership of the work disclosed in the application will form part of the database of the NCC, thereby allowing easy verification by third parties. Proof of registration with the NCC is very useful in legal proceedings and may be tendered as evidence of the details therein.

Trademarks: Trademark registration protects distinctive names, logos, slogans and other words or combination of letters in respect of particular goods or classes of goods. The registration of a trademark:

• gives the rights holder the exclusive right to use that trademark in relation to the relevant goods; and
• generally prohibits everyone else from using that mark or an identical mark in relation to those goods in the course of trade in a manner that suggests:
• • the mark or identical mark is being used as a trademark; or
  • there is a connection between the goods and the rights holder.

A trademark is therefore a powerful tool for the protection of brand/image value. Where a trademark is not registered, the rights holder may nevertheless have its intellectual property protected under the tort of passing off. However, it is advisable to obtain trademark registration because passing off is informal and the protection offered by passing off is limited in scope. For instance, protection under passing off is available only:

• to brands whose marks has achieved goodwill/reputation in relation to the goods or services in question; and
• where the use of the mark by the third party is likely to cause or has caused injury to the brand (presumably to the goodwill of the brand).

As such, it may be difficult to establish goodwill and/or injury. These limitations do not apply to trademarks.

Patents: A patent confers exclusive rights in new inventive processes or products capable of industrial application. Specifically:

• the holder of a patent over a product enjoys the exclusive right to make, import, sell, use or stock for purpose of sale or use the relevant products; and
• the holder of a patent over a process enjoys all of the aforesaid as well as the exclusive right to apply the process.

In Nigeria, as in most jurisdictions, a patent is granted for 20 years, to enable the inventor to profit from its inventive effort. A blockchain patent holder may choose either to use the patented technology itself or to license it to another user or users.

Answer ... We are unable to recommend any particular open-source platform. However, the primary consideration with respect to open-source platforms is how they are used and not necessarily which open-source platform is used. For instance, whether an application developed on an open-source platform can generate IP rights will typically be a matter assessed and determined on a case-to-case basis, drawing on the extent of original work in developing such application and not necessarily on which open-source platform is used.

That said, Ethereum, BNB Smart Chain and Fantom appear to be the platforms of choice for blockchain developers in Nigeria.

Answer ... As reflected in an EY report entitled “How Blockchain Can Impact the Intellectual Property Life Cycle” and a World Intellectual Property Organization report entitled “Blockchain: Transforming the Registration of IP Rights and Strengthening the Protection of Unregistered IP Rights”, blockchain offers myriad advantages in the IP context, including the following:

• Database of registered intellectual property: The IP authorities may introduce a hybrid blockchain as a database for recording all registered intellectual property in Nigeria. This would cover trademarks, patents, industrial designs and voluntarily registered copyright. This database should be made accessible to the public, thereby allowing members of the public to view and confirm registration of any particular piece of intellectual property.
• IP management: Organisations and individuals can use blockchain to keep track of all their respective intellectual property. The entire lifecycle of IP assets –including all transactions carried out in relation to the intellectual property – can be viewed and verified all the way back to the point of creation. Accordingly, attempts to pass off counterfeits can be discovered more easily by checking the blockchain. This, in fact, is similar to what is currently done by Chekkit using blockchain.
• IP monetisation: Blockchain may be employed for the purposes of monetising intellectual property. For example, using the instrumentality of smart contracts, organisations and persons can set up automatic royalties payable upon the conclusion of any transaction involving their intellectual property. Similarly, intellectual property can be tokenised, thereby boosting liquidity and increasing monetisation opportunities over the intellectual property.
• Co-authorship: Using blockchain and smart contracts, parties can set out parameters to determine the stake that each party will hold in the completed work (based on the contribution made by each party) and automatically remit amounts due to each party from the commercial exploitation of the completed work on the blockchain.
• Infringement alert: Using blockchain, smart contracts and oracles, organisations and individuals can set up parameters which will be triggered once seemingly infringing content is discovered. The smart contracts can then:
• • send a notification to the organisation/individual about the content; and/or
  • send a notice-and-takedown request to any platform on which the content is discovered.

Answer ... The PSV25 effectively captures what to expect in the coming years regarding the adoption of technology-enabled innovations in the financial market. Regulatory agencies are gearing up to the task of maximising the prospects and minimising the accompanying challenges. The general focus is a shift towards developments that will drive digital innovation and payment in the future, such as contactless payments, big data and open banking. The adoption of blockchain-based and distributed ledger technology-enabled digital assets, virtual currencies, smart contracts and similar continues to move to the fore of regulatory discourse and underscores the importance of cryptocurrencies.

The growing adoption of cryptocurrencies such as Bitcoin, Ethereum and stablecoins among Nigerians means that they can no longer be overlooked by the regulatory authorities. In a recent report, global cryptocurrency exchange company Binance ranked Nigeria as the leading country in the world in terms of cryptocurrency adoption. Similarly, in a survey conducted jointly with Statista in 2021, the World Economic Forum revealed that 33% of respondents from Nigeria either own or use cryptocurrencies.

In the next few years, we expect to see legislation being passed by the legislature to legitimise cryptocurrencies and other blockchain-based assets, instruments and investments. This will provide a strong legal basis for efforts already made by the SEC. Once this happens, we expect that other relevant regulators (e.g., the CBN, the NAICOM, the National Pension Commission, the Nigerian Investment Promotion Commission, the NITDA, the NDPB and the FCCPC) will develop regulatory frameworks for blockchain-based solutions and offerings in the Nigerian market. This prediction is based on the growing popularity and use of cryptocurrencies among Nigeria’s youthful population and the inherent disadvantages of not regulating same. Also, the presidential mandate, contained in the National Blockchain Policy unveiled in May 2023, directing the NITDA, CBN, SEC and other relevant regulatory bodies to develop regulatory instruments for the deployment of blockchain technology across various sectors of the economy, provides some level of assurance that the necessary regulatory frameworks for onboarding a blockchain-powered economy will emerge in the nearest future.

Legislative changes are also being considered. For instance, there is a bill before the National Assembly proposing amendments to the Investments and Securities Act of 2007. The bill would classify virtual assets as securities and therefore make them legal capital for investment. Also, the CBN is contemplating introducing a regulatory policy framework for the implementation of cryptocurrencies (specifically stablecoins) in the country – a complete departure from the position it has hitherto adopted on cryptocurrencies. However, the current National Assembly is gradually winding down, making it increasingly unlikely that the proposed amendments to the Investments and Securities Act will be passed before the end of the current political term. This may delay the introduction of a primary legal and regulatory framework for cryptocurrencies in Nigeria for a few more years.

Answer ...

• The amendment of the Investments and Securities Act to recognise cryptocurrencies and other blockchain-based assets, instruments and investments.
• The amendment of the NIPC Act to include fintech as a ‘priority area’ that requires substantial incentives for growth, and the encouragement of the NIPC to engage support for fintech companies to invest more in blockchain technologies.
• Collaborative regulatory efforts among relevant regulators to develop a comprehensive framework for regulating cryptocurrencies and other blockchain-based assets, instruments and investments, in order to boost investor confidence and attract capital into the blockchain industry.
• The further amendment of the tax legislation to specifically recognise cryptocurrencies and other blockchain-based assets as taxable properties, such that the proceeds from the disposal of such assets can be made liable to the payment of value added tax, capital gains tax, personal income tax and corporate income tax, as appropriate.

Answer ... There are several impediments to the adoption of blockchain technology in Nigeria, the most significant of which include the following:

• Inadequate power supply: This is an existential challenge to blockchain adoption. Most blockchain technology follows the infrastructure of Bitcoin and uses ‘proof of work’ as a consensus algorithm. This requires computational power to keep the system live, which consumes a lot of energy. For instance, Bitcoin mining consumed 161 terawatts of electricity in 2022; while we currently have no figures for energy generation in Nigeria for 2022, less than 37,000 gigawatts were generated in Nigeria in 2021. Indeed, the country is currently plagued by widespread insufficient energy generation/supply.
• Lack of regulation: There are no specific regulations governing blockchain-based transactions, making the system open to abuse. In addition, regulators which ought to step up and introduce regulations have distanced themselves from the space and even maintained a hostile attitude – including, somewhat ironically, on the grounds that the space is currently unregulated.
• Security risks: The risk of cyberattacks on the blockchain system makes regulators wary of supporting the adoption of blockchain technology. There is a high risk of hackers taking over a network and exploiting it for their own purposes. For instance, during an attack, hackers can alter the transaction process and restrict other people from creating a block. There is therefore a need for major investment in the technology to improve the security of the protocol layer to make blockchain safe for use.

Answer ... The optimal use of blockchain technologies in Nigeria depends largely on its legal and administrative adoption by the government. There are potential gains waiting to be unlocked from blockchain-based digital assets and investments, and the government will likely promote investment in blockchain technologies once these gains become realisable.

The adoption of cryptocurrencies by the government and their subsequent approval by regulatory authorities for payments, investments and commercial transactions are a potential growth driver that could help hedge against inflation, engage Nigeria’s youthful population in productive activities and reduce poverty.

The top tips for a boom in blockchain technologies in Nigeria include the following:

• the adoption of cryptocurrencies and blockchain-based assets as mediums of payment;
• the legalisation of cryptocurrencies as capital for investment;
• the operationalisation of digital asset exchanges established in the Securities and Exchange Commission’s Digital Asset Rules to enable the issuance and trading of initial coin offerings, security token offerings and all other digital asset token offerings;
• the classification of digital and virtual assets as taxable assets to enable the relevant tax authorities to develop regulations and guidelines for including them in the tax regimes; and
• the facilitation of the direct exchange of cryptocurrencies and other blockchain-based assets with the fiat currency (naira).

However, there are certain sticking points in the use of blockchain technologies that should be properly addressed, including the following:

• The decentralised and anonymous nature of the blockchain and DLT-based transactions makes cryptocurrencies and blockchain-based assets a potential haven for illicit financial flows. Nigeria’s adoption of blockchain technologies must therefore be accompanied by stricter enforcement of the anti-money laundering/combating the financing of terrorism and proliferation financing regulations and laws. It remains to be seen how the regulatory authorities and security agencies will collaborate effectively on this.
• Cybercrime remains a potential risk to the blockchain revolution in Nigeria. The susceptibility of the blockchain system to attacks by hackers makes organisations – particularly financial and investment institutions – wary of the adoption of blockchain technologies. The Cybercrimes (Prohibition, Prevention, etc) Act of 2015 should be amended to recognise attacks on distributed ledeger technology-based systems and transactions, with more severe punishments prescribed for hacking into blockchain-based investments. However, the main concern seems to be safeguarding the system and preventing it from attacks rather than punishing hackers.
• The right of data subjects to request the erasure of their personal data from data controllers is enshrined in the Data Protection Regulation 2019. This is also provided for in the Data Protection Bill which is currently before the National Assembly. However, the decentralised and immutable nature of blockchain-based systems means that in practice, this right cannot be exercised by interested data subjects. In case of the adoption of cryptocurrencies and other blockchain-enabled digital and virtual assets, the risk of a data breach becomes increasingly existential. One possible – albeit limited – solution is to require blockchain developers to incorporate anonymisation and/or pseudonymisation frameworks prior to including any personal data on the blockchain. In addition, a combination of zero-knowledge proof and smart contracts could be helpful in promoting confidentiality and general data minimisation, and thereby reducing the likelihood of a request for erasure. The use of proxy re-encryption technology would also assist in achieving these goals by allowing secured sharing of data among multiple participants within the blockchain network.