Nigeria's Securities and Exchange Commission (SEC) has introduced a regulatory proposal that would bring offshore cryptocurrency platforms into its licensing framework if they operate in Nigeria, serve Nigerian residents, or target local investors through digital channels.
Published on Aug. 20, the proposal opened a two-week public comment window ending on Sept. 3, though the SEC page did not specify a cutoff time or time zone. The measures are currently under consultation and are not yet in force.
Scope and Local Presence Requirements
The scope of the proposal applies to platforms based on their user base rather than solely their place of incorporation. Any digital-asset business operating in Nigeria or targeting residents would generally be required to incorporate in the country, maintain a registered office, and appoint a resident chief executive, managing director, or equivalent principal officer alongside resident sponsored individuals, unless the SEC approves otherwise.
Foreign stablecoin issuers targeting the Nigerian market or whose tokens are used by regulated local entities must maintain a local representative and adhere to SEC-prescribed prudential requirements.
Capital Floors and Custody Rules
Under the proposed Schedule I, different categories of virtual asset service providers face distinct minimum paid-up capital and registration fee requirements:
- Digital Asset Exchanges and Custodians: ₦2 billion minimum capital and a ₦30 million registration fee.
- Digital Asset Platforms, Offering Platforms, and RWA Tokenization Platforms: ₦500 million capital and a ₦30 million registration fee.
- General VASPs: ₦200 million capital and a ₦15 million registration fee.
Additionally, Schedule I mandates a fidelity insurance bond covering at least 25% of the stipulated minimum paid-up capital. Custodians would also be required to keep at least 80% of client digital and virtual assets in cold storage, restricting hot and warm wallets strictly to operational needs.
Stablecoin Reserve Standards
Stablecoin issuers face tiered reserve floors depending on the underlying asset backing the token. Naira-backed and commodity-backed tokens require at least 100% backing, while foreign-currency-backed tokens must maintain 120% backing. Crypto-backed stablecoins face a collateral range between 150% and 200%, determined by factors including volatility, liquidity, concentration, and collateral quality.
