The Central Bank of Nigeria (CBN) has introduced stricter regulations for stablecoin issuers and other virtual asset businesses operating in the country, including a ban on algorithmic stablecoins and new minimum capital requirements of up to ₦15bn.
The new framework, which took effect on November 5, 2026, introduces tighter licensing, reserve management, anti-money laundering and operational requirements for companies offering stablecoin services to Nigerians.
Under the rules, issuers of foreign currency-backed stablecoins must maintain a minimum paid-up capital of ₦15bn, while those issuing naira-backed stablecoins are required to have at least ₦10bn.
The CBN has also prohibited algorithmic stablecoins, which rely on mechanisms such as supply adjustments to maintain their value rather than adequate reserve backing.
Other stablecoin arrangements that lack sufficient reserves or enforceable redemption rights are also prohibited under the framework.
The regulations classify stablecoin issuers into two categories. Class 1 covers naira-backed stablecoins, while Class 2 applies to foreign currency-backed tokens, including those pegged to the US dollar.
Each stablecoin issuer must obtain separate written approval from the CBN before introducing a token to the Nigerian market. Applicants are also required to disclose the token’s reference currency, name, ticker, supported blockchains and reserve arrangements.
Foreign currency stablecoin issuers must incorporate a company in Nigeria and obtain a Foreign Currency Issuer Licence. The CBN said licences obtained in other jurisdictions would not be sufficient to authorise operations in the country.
The rules further require stablecoin issuers to maintain reserves equivalent to the total value of tokens in circulation, ensuring one-to-one backing.
Issuers must conduct daily checks to reconcile their reserves with outstanding tokens and are prohibited from creating or distributing new tokens before the corresponding reserves are available.
They must also maintain an additional reserve buffer of at least two per cent to provide further protection against potential losses or disruptions.
Beyond stablecoin issuers, other virtual asset service providers face a minimum capital requirement of ₦1bn under the new framework.
Businesses operating in the securities market will also remain subject to the Securities and Exchange Commission’s regulatory oversight, with its capital requirements applying alongside the CBN’s rules where relevant.
The central bank has extended the regulatory requirements to foreign companies targeting Nigerian customers and services capable of affecting the country’s payment systems or foreign exchange market.
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Under the compliance provisions, issuers and other covered businesses must implement customer identification procedures, sanctions screening, transaction monitoring and other anti-money laundering and counter-terrorism financing measures.
The framework also makes compliance with the Travel Rule mandatory for qualifying virtual asset transfers, requiring relevant customer and transaction information to accompany transfers between service providers.
Stablecoins associated with sanctioned individuals, entities or jurisdictions are prohibited under the rules.
Existing regulated virtual asset service providers have 30 days from the commencement of the framework to register with the CBN and 60 days to begin submitting supervisory reports.
They are also required to apply for the appropriate licences within 180 days. Providers that fail to meet the requirements must discontinue regulated activities.
The CBN warned that violations could attract significant financial penalties, including a minimum fine of ₦100m and an additional penalty of at least ₦1m for every day the breach continues.
The new requirements come amid growing use of stablecoins in Nigeria for payments, savings and cross-border transfers, particularly as individuals and businesses seek alternatives for moving and holding digital assets.
The regulations are expected to increase compliance costs for international stablecoin companies seeking access to the Nigerian market while requiring more issuers to establish a formal local presence.
The framework also follows Nigeria’s earlier approval of a pilot for the naira-backed cNGN stablecoin through its regulatory sandbox in January 2024.
Meanwhile, Tether has announced plans to work with Shiga on wallet services targeting markets in Africa and the Gulf. Shiga’s Nigerian licence, however, is still awaiting final approval.
The CBN’s latest measures signal a move towards tighter oversight of stablecoin operations, with greater emphasis on reserve transparency, consumer protection and the ability of regulators to monitor digital asset activities that could affect Nigeria’s financial system.
The central bank did not respond to requests for comment by press time.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
