Nigeria's central bank has introduced a regulatory framework for non-security virtual assets, requiring stablecoin issuers to obtain licenses, hold substantial capital, and maintain fully backed reserves. The framework, rolled out by the Central Bank of Nigeria (CBN) on November 5, 2026, also bans algorithmic stablecoins outright.
Capital requirements by class
The framework divides stablecoins into two categories. Class 1 covers tokens pegged to the naira, while Class 2 covers tokens referenced to foreign currencies such as the US dollar.
Class 1 issuers must meet a minimum capital requirement of N10 billion. Class 2 issuers face a higher threshold of N15 billion. Other virtual asset service providers (VASPs) covered by the framework have a minimum capital requirement of N1 billion.
Reserve and redemption rules
Stablecoins must hold at least 100% reserves in eligible assets, plus an additional 2% buffer. Holders must be able to redeem their tokens at par, generally by the next business day.
Prohibitions and access restrictions
In addition to banning algorithmic stablecoins, the CBN prohibited fiat-referenced tokens that are backed primarily by other virtual assets.
Foreign-currency stablecoins can reach Nigerian users only through locally licensed entities. Arrangements with foreign intermediaries will not satisfy the requirement, meaning global issuers need a licensed local partner or their own local footprint to serve Nigerian customers.
The rules also call for enhanced identity verification on peer-to-peer transactions facilitated by platforms.
Deadlines for existing operators
Existing operators must register with the CBN within 30 days of the regulations taking effect. They then have 180 days from that effective date to apply for the relevant license.
Regulatory division
The CBN oversees non-security virtual assets used for payments and settlements. Nigeria's Securities and Exchange Commission retains oversight of digital assets classified as securities.
Background
The licensing regime follows earlier regulatory moves in 2026, including an executive order that established a Virtual Asset Council and the launch of an expansive regulatory sandbox. The sandbox was presented as a way to encourage innovation while aligning activity with monetary and financial stability goals. The new framework formalizes that approach, shifting from a more restrictive stance to a structured licensing system intended to balance innovation against consumer protection.
