Nigeria’s central bank mandates licenses for stablecoin issuers

The Central Bank of Nigeria (CBN) rolled out a comprehensive regulatory framework for non-security virtual assets on November 5, 2026, with stablecoin issuers facing strict new requirements. The framework establishes licensing mandates, substantial capital floors, and full reserve backing requirements while prohibiting algorithmic stablecoins entirely.

Capital Requirements

The CBN divides stablecoins into two categories: Class 1 tokens pegged to the naira require minimum capital of N10 billion, while Class 2 tokens referenced to foreign currencies like the US dollar face a higher threshold of N15 billion. Other virtual asset service providers (VASPs) under the framework must meet a minimum capital requirement of N1 billion.

Reserve Rules

Stablecoin issuers must maintain at least 100% reserves in eligible assets, plus an additional 2% buffer. These reserves must enable holders to redeem their tokens at par value, generally by the next business day, ensuring immediate convertibility.

Prohibitions and Access

The framework explicitly bans algorithmic stablecoins and prohibits fiat-referenced tokens primarily backed by other virtual assets. Foreign-currency stablecoins can only reach Nigerian users through locally licensed entities, with arrangements with foreign intermediaries insufficient to meet requirements.

Peer-to-peer trading platforms must implement enhanced identity verification for transactions. Existing operators have 30 days from the regulations' effective date to register with the CBN, followed by 180 days to apply for the relevant license.

Regulatory Approach

The CBN oversees non-security virtual assets used for payments and settlements, while Nigeria's Securities and Exchange Commission maintains oversight of digital assets classified as securities. This framework represents a shift from Nigeria's previous restrictive approach to a structured licensing system designed to balance innovation with consumer protection.