In recent years, global financial markets have begun undergoing a quiet but profound transformation. Assets that once existed only in paper registries, title deeds, and physical vaults are now being digitised, fractionalised, and traded on blockchain infrastructure. This phenomenon is commonly referred to as Real World Asset (RWA) tokenisation.
Across jurisdictions such as Dubai, Singapore, Switzerland, and the European Union, regulators are actively building legal frameworks that allow real estate, commodities, and other tangible assets to be represented by blockchain tokens.
Nigeria has not yet issued a dedicated regulatory framework specifically for real estate tokenisation. However, something important happened in March 2025 that many market participants have not yet fully understood.
Nigeria enacted the Investments and Securities Act 2025 (ISA 2025).
While the legislation does not explicitly mention “tokenised real estate,” it quietly introduced several provisions that make legally compliant real estate tokenisation possible within the Nigerian capital market framework.
To understand why this matters, it is helpful to start with a simple story.
The Lagos Property Problem
Imagine a commercial building in Victoria Island, Lagos.
The building is valued at $20 million and generates stable rental income from corporate tenants. It is a high-quality investment asset. Yet the ownership structure reflects a problem common across many real estate markets.
Only a handful of wealthy investors can afford to purchase such a property.
Institutional investors may participate. Family offices may participate. But for most Nigerians and global investors who would like exposure to Nigerian real estate, access remains extremely limited.
This lack of accessibility creates several structural inefficiencies.
First, capital formation is slow. Developers struggle to attract diverse sources of investment.
Second, liquidity is extremely limited. Selling a large property often requires months of negotiations.
Third, the investment opportunity remains restricted to a narrow class of investors.
Tokenisation proposes a different model.
Instead of selling the entire building to a single buyer or small consortium, the property can be fractionalised into digital units, allowing thousands of investors to participate.
The question that immediately follows is a legal one.
Can this structure actually work under Nigerian law?
The answer lies inside the Investments and Securities Act 2025.
Understanding the Legal Foundation
The ISA 2025 significantly expanded the regulatory powers of the Securities and Exchange Commission (SEC) and modernised Nigeria’s capital market infrastructure.
The Act establishes the SEC as the apex authority responsible for regulating the Nigerian capital market, protecting investors, and promoting transparent and efficient markets.
More importantly, the Act expressly empowers the Commission to register and regulate:
- securities exchanges
- digital asset exchanges
- capital market operators
- custodians
- collective investment schemes
- and other financial market infrastructure participants.
These provisions create the regulatory foundation required for digital asset markets and tokenised financial instruments.
In addition, the Act recognises that securities may be issued and transferred through electronic or digital mechanisms, enabling dematerialised securities issuance.
Taken together, these provisions open the door to an important possibility.
Real estate investments can be structured as regulated securities and digitally represented on blockchain infrastructure.
This is where the real story begins.
From Property Title to Token: The Legal Structuring Model
A legally compliant real estate tokenisation structure does not begin with blockchain technology.
It begins with corporate structuring and securities law.
The most widely accepted model globally follows a three-layer structure.
Step 1: Establishing a Special Purpose Vehicle
The first step is to create a Special Purpose Vehicle (SPV).
This SPV is typically incorporated as a limited liability company whose sole purpose is to own the real estate asset.
The structure works as follows:
The property is transferred into the SPV.
The SPV becomes the legal title holder of the property.
This ensures that investors do not hold direct title to the physical property. Instead, they hold financial interests in the entity that owns the property.
This approach is widely used across global real estate markets because it simplifies ownership, governance, and asset management.
Step 2: Structuring the SPV as an Investment Vehicle
The next step is to structure the investment offering under Nigerian securities law.
Under ISA 2025, investment schemes that pool funds from investors must operate within the Collective Investment Scheme (CIS) framework regulated by the SEC.
Collective investment schemes allow investors to pool capital and invest in underlying assets while benefiting from professional management and regulatory oversight.
The Act provides for the registration, supervision, and regulation of collective investment schemes and their managers.
By placing the SPV within a regulated investment scheme structure, the project gains several advantages:
• investor protection mechanisms
• regulatory supervision
• disclosure requirements
• legal clarity.
Investors therefore subscribe to investment units representing economic interests in the scheme.
Step 3: Tokenising the Investment Units
The final step introduces the blockchain component.
Instead of issuing traditional paper share certificates or registry entries, the investment units are represented as digital tokens on a blockchain network.
Each token represents a fractional economic interest in the investment scheme.
For example, consider a property valued at $20 million.
The investment vehicle may issue 20 million tokens, where each token represents $1 of ownership value.
Investors purchasing tokens receive:
• proportional rights to rental income
• proportional rights to capital appreciation
• proportional voting rights where applicable.
These tokens function as digital securities.
Ownership transfers are recorded on the blockchain ledger, while the legal rights remain anchored in the investment scheme structure.
Secondary Market Liquidity
One of the most transformative aspects of tokenisation is the possibility of secondary market trading.
Traditional real estate investments are notoriously illiquid. Selling a property often requires lengthy negotiation and complex transaction processes.
Tokenised real estate introduces a different model.
Investors can buy and sell fractional interests on regulated trading platforms.
The ISA 2025 explicitly authorises the SEC to regulate digital asset exchanges and other trading venues where securities or digital assets may be traded.
This creates the possibility of regulated secondary markets for tokenised assets.
In practical terms, investors holding real estate tokens could trade their positions on approved digital asset platforms.
Liquidity that once took months to unlock may potentially be achieved in minutes.
Investor Protection and Disclosure
Tokenisation does not eliminate the need for investor protection.
In fact, the ISA 2025 imposes strict disclosure requirements on securities offerings.
Any investment offered to the public must be accompanied by a prospectus containing material information about the investment.
This includes disclosures relating to:
• the underlying property asset
• financial projections
• management structure
• investment risks
• governance arrangements.
Issuers may face civil and criminal liability for misstatements contained in a prospectus.
These requirements ensure that tokenised investments remain subject to the same investor protection standards that apply to traditional securities.
Custody, Governance, and Asset Protection
Institutional-grade tokenisation requires more than digital tokens.
The structure must also incorporate professional oversight.
Typically, this involves several regulated participants.
A custodian safeguards investor funds and asset documentation.
A trustee oversees compliance with the investment scheme rules and protects investor interests.
An asset manager manages the underlying real estate asset and distributes income to investors.
These components are critical to ensuring that the tokenisation structure remains compliant with capital market regulations and investor protection principles.
A Realistic Case Study
To illustrate how this could work in practice, consider the earlier example of the Victoria Island office building.
The property is valued at $20 million and generates annual rental income of $2 million.
Under a tokenised structure:
The building is transferred into an SPV.
The SPV becomes part of a regulated collective investment scheme.
The scheme issues 20 million digital tokens representing investment units.
Investors purchase tokens through a regulated offering.
Rental income generated by the building flows into the SPV and is distributed proportionally to token holders.
If an investor owns 100,000 tokens, they receive 0.5 percent of the annual rental income.
If the property appreciates in value and is eventually sold, token holders also receive their proportional share of the proceeds.
This structure allows investors to gain exposure to premium real estate assets with significantly lower capital requirements.
Why This Matters for Nigeria
Nigeria faces a persistent capital formation challenge in its real estate sector.
Developers often struggle to secure financing.
Institutional investors remain cautious due to liquidity concerns.
Retail investors rarely gain access to high-quality property investments.
Tokenization has the potential to address these structural challenges.
By enabling fractional ownership and digital trading infrastructure, tokenised real estate can attract:
• domestic investors
• diaspora capital
• international institutional investors.
The ISA 2025 has already laid the regulatory groundwork necessary to support these innovations.
What remains is the development of clear regulatory guidelines and responsible market implementation.
How CRYPTOVERSE Legal Can Help
The emergence of real world asset tokenisation presents significant opportunities but also complex regulatory challenges.
Successful projects require careful legal structuring to ensure compliance with securities laws, digital asset regulations, and investor protection requirements.
CRYPTOVERSE Legal Consultancy specialises in blockchain regulation, digital asset structuring, and virtual asset licensing.
Our advisory services include:
• legal structuring of real estate tokenisation projects
• regulatory analysis under capital market and digital asset laws
• preparation of prospectuses and investment documentation
• licensing strategies for digital asset platforms
• regulatory engagement with financial authorities.
Our team works with developers, founders, and institutional investors seeking to navigate the evolving regulatory landscape of digital assets and tokenised investments.
As jurisdictions around the world begin integrating blockchain technology into capital markets, legally compliant tokenisation structures will play a central role in the future of finance.
For organisations exploring real estate tokenisation or other real world asset projects, obtaining the right legal guidance at the earliest stage is critical.
The future of asset ownership is gradually becoming digital.
The legal frameworks are beginning to catch up.
And for those who understand both the technology and the regulatory landscape, a new class of capital markets is beginning to emerge.
FAQs
1. Is real estate tokenisation legal in Nigeria under ISA 2025?
Yes, ISA 2025 provides the first clear legal foundation for real estate tokenisation in Nigeria. Tokenised property interests that qualify as investment contracts fall under SEC Nigeria’s jurisdiction. Proper structuring under the Act makes compliant tokenisation achievable for the first time.
2. What does ISA 2025 say about tokenised assets in Nigeria?
ISA 2025 formally recognises digital assets as investable instruments under Nigerian securities law. This means tokenised real estate interests can be legally issued, offered, and traded — provided issuers register with SEC Nigeria and meet full disclosure and compliance requirements.
3. Which regulator oversees real estate tokenisation in Nigeria?
The Securities and Exchange Commission Nigeria is the primary regulator. If tokenised property interests qualify as securities or investment contracts under ISA 2025, SEC registration is mandatory. The CBN also has oversight where stablecoins or payment rails are used in the transaction structure.
4. Can foreign investors buy tokenised real estate in Nigeria?
Yes, but with conditions. Foreign investors must comply with Nigeria’s Land Use Act, SEC registration rules, and CBN foreign exchange guidelines. Cross-border token transfers involving Naira trigger additional CBN obligations. Legal structuring is essential before marketing to international investors.
5. What structure is needed to tokenise property legally in Nigeria?
Issuers typically use a Special Purpose Vehicle to hold the property, issue tokens representing beneficial interests, register the offering with SEC Nigeria, and appoint a compliant custodian. AML and KYC obligations apply throughout. Legal counsel is essential at every structuring stage.