The Central Bank of Nigeria (CBN) has introduced a new regulatory framework requiring foreign-currency stablecoin issuers seeking access to the Nigerian market to establish locally incorporated entities, obtain regulatory approval, and maintain a minimum paid-up capital of ₦15 billion.
The requirements are contained in the Regulations for the Operations of Non-Security Virtual Assets in Nigeria, published on November 5, 2026. The framework establishes licensing, capital, reserve, liquidity, redemption and operational requirements for stablecoin issuers and other virtual asset service providers operating in or targeting Nigeria.
Under the new rules, foreign-currency-referenced stablecoins, including dollar-pegged tokens, fall under the Class 2 classification and require a Foreign Currency Issuer Licence from the CBN.
The regulations apply to foreign issuers whose tokens are offered, marketed, distributed, exchanged, held in custody, redeemed, or otherwise made available to people in Nigeria, regardless of whether the issuer maintains a physical presence in the country.
The framework took effect on November 5, 2026, marking a significant development in Nigeria’s approach to regulating stablecoins and integrating digital assets into its financial and payments infrastructure.
Foreign stablecoin issuers must establish Nigerian entities
One of the most consequential provisions of the new framework is the requirement for foreign-currency stablecoin issuers to operate through Nigerian-incorporated entities.
Section 11.1 states that a foreign-currency stablecoin can only be issued by a Nigerian-incorporated entity holding a valid Class 2 Foreign Currency Issuer Licence granted by the CBN.
The stablecoin must also receive regulatory approval before it can be offered, distributed, marketed, exchanged, held in custody, or redeemed in Nigeria.
This means that an existing foreign licence or regulatory approval from another jurisdiction will not independently satisfy Nigeria’s requirements.
However, the framework does not completely exclude international stablecoin companies from the Nigerian market.
Under Section 11.2, a Nigerian-incorporated issuer may be owned, controlled by or associated with a foreign issuer or international corporate group.
The Nigerian entity must nevertheless remain fully responsible for regulatory compliance and provide the CBN with unrestricted supervisory access to its books, records, systems, reserve arrangements and relevant group information.
CBN sets ₦15bn capital requirement and additional liquidity obligations
The regulations introduce a minimum paid-up capital requirement of ₦15 billion for foreign-currency stablecoin issuers.
This is higher than the ₦10 billion required of issuers of naira-referenced stablecoins under the Class 1 category.
Other providers of non-security virtual asset services face a separate minimum paid-up capital requirement of ₦1 billion, depending on their licensing or authorisation category.
Importantly, the capital requirements are separate from the reserve assets and operational liquidity issuers must maintain. These obligations cannot be combined to satisfy one another.
Foreign-currency stablecoin issuers must also maintain operational liquidity that is legally and operationally accessible to meet Nigerian redemption requests, payment obligations and other liabilities, including during periods of financial stress.
Under Section 11.3.1, the minimum operational liquidity is determined by the highest of three thresholds:
- US$10 million, or its equivalent in the stablecoin’s reference currency.
- 15% of the aggregate Nigeria-linked outstanding liabilities attributable to the stablecoin.
- The amount reasonably required to cover 30 days of stressed Nigerian redemption requests, payment obligations and other expected liquidity outflows.
The operational liquidity must be maintained separately from the issuer’s regulatory capital and reserve pool. It must also be accessible through arrangements approved by the CBN.
The regulator requires these funds to be maintained predominantly in the stablecoin’s reference currency, with arrangements generally involving designated accounts or liquidity facilities at CBN-licensed deposit money banks.
Stablecoins must maintain full reserve backing and additional protection
The CBN has also introduced strict requirements governing the assets backing stablecoins issued under the framework.
Licensed issuers must maintain reserve assets equivalent to at least 100% of their outstanding stablecoin obligations, alongside an additional overcollateralisation buffer of at least 2%.
The rules prohibit issuers from minting new tokens before receiving equivalent eligible reserve assets. Issuers must also reconcile their outstanding tokens against their reserve pools at the end of every business day.
Under Section 24.12, at least 40% of the total reserve pool must be maintained in cash or eligible high-quality liquid assets.
For Class 2 issuers, this requirement must be met in the stablecoin’s reference currency, alongside the separate Nigerian operational liquidity obligation.
The framework also establishes an enforceable right for holders to redeem their stablecoins at face value. Standard redemption requests must generally be completed no later than the end of the business day following receipt of a valid request, without standard redemption charges.
Foreign stablecoins can only be distributed through authorised providers
The new requirements extend beyond issuers to the companies responsible for bringing stablecoins to Nigerian users.
Section 11.5 requires Class 2 stablecoins to be distributed through persons licensed or authorised by the CBN under the regulations.
This has implications for exchanges, wallet providers, payment platforms, brokers and other intermediaries involved in making foreign-currency stablecoins available to customers.
The framework also introduces enhanced reporting obligations covering transaction volumes and values, naira inflows and outflows, customer information and suspicious activity patterns.
The CBN will also monitor foreign-exchange activity associated with these transactions, including relevant conversion rates, transaction purposes, counterparties and the direction of fund flows.
These provisions give the regulator greater visibility into how foreign-currency stablecoins circulate within Nigeria’s financial and payments ecosystem.
Existing operators face 30-day registration and 180-day licensing deadlines
The CBN has established a transition period for businesses already operating in the market.
Under Section 54.1, existing operators must register with the regulator within 30 days of the regulations’ commencement and apply for the appropriate licence or authorisation within 180 calendar days.
During this period, eligible operators may continue operating at their existing scale, subject to the CBN’s interim conditions, AML/CFT compliance and supervisory reporting requirements.
Existing Class 2 stablecoin arrangements face an additional condition: continued access to the Nigerian market during the assessment period requires the CBN’s express interim permission.
The transition period does not automatically exempt foreign issuers from the Nigerian incorporation and licensing requirements.
Operators that fail to submit the required application within the transition period must cease the relevant activities until they obtain the necessary approval.
Industry welcomes regulatory clarity but questions capital requirements
Industry stakeholders have expressed broadly positive reactions to the CBN’s new stablecoin regulations, although concerns remain about the financial burden the framework could place on local issuers.
Rume Ophi, a Nigerian crypto industry stakeholder, described the development as welcome, arguing that stablecoin issuance requires clear regulatory oversight, particularly as digital assets become increasingly integrated into financial markets.
Ophi said the requirements could help strengthen confidence in the sector by ensuring that issuers maintain adequate financial backing and liquidity to meet their obligations.
He also welcomed the requirement for foreign issuers to establish a local presence, noting that it could create employment opportunities for Nigerians and encourage international digital asset businesses to deepen their engagement with the country’s market.
However, he expressed reservations about the financial barriers facing indigenous stablecoin issuers, suggesting that the capital requirements could make it difficult for smaller Nigerian businesses to enter the market.
Ophi also highlighted the importance of giving existing operators sufficient time to adapt to the new framework, noting that raising the required capital and meeting regulatory obligations could be challenging within a relatively short transition period.
On the restrictions around algorithmic stablecoins, Ophi supported the regulator’s position, arguing that assets without conventional reserve backing could expose users and the wider financial system to significant risks.
He also cautioned against narratives portraying the new regulations as an outright restriction on stablecoin activity in Nigeria.
In his view, the industry needs to recognise that the market is evolving and that appropriate regulatory oversight is part of that transition.
Laolu Samuel-Biyi, co-founder of Nigerian cryptocurrency exchange Busha also welcomed the regulations, describing them as an important step towards regulatory clarity for digital assets in the country.
Busha recently introduced NGNb, its naira-backed stablecoin, and sees significant opportunities for tokenised naira in payments, settlement and international commerce.
However, Laolu raised concerns about what he described as disproportionate capital requirements, particularly for stablecoin issuers maintaining full reserve backing.
“Stablecoins backed 100% by independently verified and Bank-prescribed reserves, without fractional lending, have a fundamentally different risk profile from banks,” Laolu said.
“Regulation should prioritise reserve integrity, transparency and redemption guarantees rather than impose capital requirements that make local issuance commercially unviable.”
He argued that fully reserved stablecoin issuers should not necessarily face capital requirements designed around the risks associated with traditional banking institutions.
Laolu also questioned the proportionality of the minimum penalties prescribed under the framework, suggesting that they appear significantly more punitive than those applicable to other financial institutions.
Despite these concerns, he expressed optimism about the CBN’s willingness to engage with industry stakeholders and address areas of concern.
“Ultimately, we need a framework that protects consumers while enabling indigenous innovation to thrive,” he said.
What the new rules mean for Nigeria’s stablecoin market
The new framework represents a significant shift in how Nigeria intends to supervise foreign-currency stablecoins and the businesses supporting their circulation.
Dollar-backed tokens have become an important part of Nigeria’s digital asset ecosystem, supporting trading, savings, remittances, payments and cross-border transfers.
By requiring local incorporation, substantial capital, dedicated redemption liquidity and authorised distribution, the CBN is seeking greater visibility and control over stablecoin activity that could influence the country’s payments infrastructure and foreign-exchange market.
However, the industry’s response suggests that regulatory clarity alone may not be sufficient to guarantee a competitive domestic stablecoin ecosystem.
While stakeholders such as Rume Ophi welcome stronger oversight, local accountability and financial safeguards, concerns raised by Busha’s Laolu highlight the need to ensure that capital requirements do not inadvertently disadvantage indigenous issuers, particularly those operating fully reserved stablecoin models.
For Nigerian fintechs and stablecoin businesses, the challenge will be balancing regulatory compliance with commercial viability.
Ultimately, the success of the framework will depend not only on its ability to protect consumers and strengthen financial oversight, but also on whether it creates an environment in which credible local innovators and international issuers can participate sustainably.
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