REGULATION | Nigeria Sets $11 Million Capital Requirement for Foreign Stablecoin Issuers, Bans Algorithmic Tokens - BitKE

The Central Bank of Nigeria (CBN) issued the Regulations for the Operations of Non-Security Virtual Assets on November 5, 2026, establishing separate licensing categories for naira-backed and foreign-currency-backed stablecoins. The framework also covers cryptocurrency exchanges, custodians, wallet providers, payment processors, and other virtual asset service providers.

Under the new rules, issuers of foreign-currency stablecoins must maintain minimum paid-up capital of approximately $11.1 million, while naira-backed stablecoin issuers face a requirement of approximately $7.4 million. Foreign issuers must establish Nigerian-incorporated entities and obtain a Class 2 Foreign Currency Issuer Licence before offering, distributing, or redeeming their tokens in the country.

Licensing Requirements

Issuers must obtain written approval for each token covering its classification, reference currency, reserve arrangements, name, ticker, and supported blockchain networks. The regulations explicitly ban algorithmic stablecoins, which derive value from algorithms rather than reserves.

Compliance Framework

The regulations mandate strict compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) obligations. These requirements include customer due diligence, sanctions screening, transaction monitoring, and Travel Rule compliance across P2P services, remittance channels, and all custodial wallets.

The CBN has also set up a dedicated working group to study stablecoin adoption in the country, signaling ongoing regulatory attention to the growing crypto market in Africa's most populous nation.