MORGANABLE BUSINESS / DIGITAL FINANCE
The Central Bank of Nigeria (CBN) has introduced new capital and licensing rules for stablecoin issuers, setting a minimum paid-up capital of ₦15 billion for companies issuing tokens linked to foreign currencies.
Akure —
The Central Bank of Nigeria (CBN) has introduced new capital and licensing rules for stablecoin issuers, setting a minimum paid-up capital of ₦15 billion for companies issuing tokens linked to foreign currencies.
It took effect on November 5, 2026, and aims to strengthen oversight of digital payment services while protecting consumers and the financial system.
The rules appear in the CBN’s Regulations for the Operations of Non-Security Virtual Assets in Nigeria.
It covers stablecoins, tokenised bank deposits and services such as custody, exchange, transfers, payment processing and settlement.
It also establishes licensing, reserve, consumer protection and anti-money laundering requirements.
The framework applies to businesses operating in Nigeria or targeting Nigerian customers.
Therefore, foreign companies cannot avoid the rules simply because they operate elsewhere.
TWO CAPITAL CATEGORIES
The CBN divides stablecoin issuers into two classes according to the currency their tokens reference.
Class 1 covers stablecoins linked to the naira, while Class 2 covers tokens linked to foreign currencies, including the US dollar.
Class 1 issuers must maintain at least ₦10 billion in paid-up capital. Class 2 issuers must hold a minimum of ₦15 billion. The CBN may demand higher amounts based on an issuer’s scale and risk profile.
Other non-security virtual asset service providers must maintain at least ₦1 billion in paid-up capital. This category includes firms that provide custody, wallet, exchange, transfer and remittance services.
The requirement is additional to any capital required under an existing Securities and Exchange Commission (SEC) licence. Companies cannot count the same funds towards both requirements.
Foreign stablecoin companies that want to serve Nigerian customers must establish a company incorporated in Nigeria and obtain the appropriate CBN licence.
A licence from another country does not replace Nigerian approval. The local company remains responsible for compliance, even when a foreign parent owns or controls it.
CAPITAL AND CUSTOMER PROTECTION
The CBN requires issuers to keep paid-up capital separate from stablecoin reserves, customer funds and operational liquidity.
Companies cannot use the same money to satisfy several financial obligations. They also cannot withdraw, pledge or deploy required capital without regulatory approval.
If an issuer’s capital falls below the required level, it must notify the CBN immediately and submit a restoration plan within 10 business days. It can also take further supervisory action where necessary.
Stablecoin issuers must maintain reserves to back the tokens they put into circulation. For naira-referenced stablecoins, the framework requires at least 20 per cent of the reserve pool to sit in a dedicated CBN reserve deposit account. Issuers cannot withdraw those funds without the bank’s prior written consent.
The bank prohibits issuers from paying interest, yields, dividends or similar benefits simply because customers hold stablecoins. It also clarifies that stablecoins are not bank deposits and do not receive protection from the Nigeria Deposit Insurance Corporation. Customers must understand that holding a stablecoin differs from keeping money in an insured bank account.
The framework also prohibits algorithmic stablecoins and restricts tokens that depend mainly on other virtual assets for backing. Such arrangements can face sharp price changes when market confidence weakens. By limiting the types of tokens issuers may offer, the CBN aims to reduce risks linked to unstable backing structures.
FOREIGN EXCHANGE AND MARKET IMPACT
The regulations bring naira conversions involving foreign-currency stablecoins under closer foreign-exchange oversight. Providers must obtain CBN approval before facilitating conversions between the naira and foreign-currency-referenced tokens. Relevant naira transactions must also pass through, or be reported to, authorised dealers designated by the bank.
Class 2 stablecoins may support approved cross-border payments, remittances, international trade and settlement. However, users cannot employ them to price or settle ordinary domestic obligations in naira unless the law permits it. The framework also prohibits operators from routing or splitting transactions to evade regulatory limits, reporting duties or foreign-exchange controls.
Virtual asset providers must identify customers and monitor transactions. They must apply anti-money laundering and counter-terrorism financing controls, screen for sanctions and maintain cybersecurity measures. These obligations aim to prevent digital asset services from supporting fraud, illicit transfers or other unlawful activity.
The CBN has also introduced oversight of peer-to-peer activity. Providers must identify customers who trade regulated tokens as a business by considering transaction volume, frequency and the number of counterparties. They must apply enhanced checks and transaction limits where required. However, identifying someone as a business trader does not authorise that person to operate without the necessary licence.
Existing virtual asset operators have a transition period to meet the new requirements. They must register with the CBN within 30 days, begin submitting supervisory reports within 60 days and complete licence applications within 180 days of the framework’s commencement. During this period, they may continue operating only at their existing scale and under conditions set by the regulator.
Operators that fail to submit applications within the required period must stop providing regulated services until they obtain approval. The CBN may also impose financial penalties and other supervisory measures for breaches involving licensing, capital, reserves, liquidity or compliance.
The new rules could reshape Nigeria’s stablecoin market. Larger international companies may have the resources to establish local subsidiaries and meet the capital thresholds.
Smaller issuers and fintech businesses, however, could face higher costs or seek partnerships with better-funded firms. Some operators may reconsider whether entering the Nigerian market remains commercially viable.
For customers, stronger reserve and redemption requirements could improve transparency and confidence.
However, stricter licensing may affect which stablecoins and service providers can legally reach Nigerian users.
The impact will depend on how quickly companies secure approval and how consistently the CBN applies the rules.
The framework also clarifies the division of responsibility between the CBN and the SEC. The CBN will supervise non-security virtual asset activities within its mandate, particularly those linked to payments and financial stability.
Security-related digital assets and capital-market products remain subject to SEC rules. Some businesses may therefore need approvals from both regulators.
Overall, the framework places stablecoin issuers and virtual asset service providers within a defined system of capital, licensing and operational controls. The CBN must now enforce the rules while allowing responsible innovation to continue.
How regulators and companies manage that balance will help determine the role of digital assets in Nigeria’s payments, remittances, trade and financial services.
