Nigeria’s central bank sets ₦15B capital rule for stablecoins, bans algorithmic tokens

The Central Bank of Nigeria (CBN) has introduced new stablecoin licensing rules requiring foreign-currency issuers to maintain at least ₦15 billion in capital while prohibiting algorithmic stablecoins across the country.

According to the CBN’s new regulations, which took effect on November 5, 2026, companies issuing naira-backed stablecoins must maintain at least ₦10 billion in paid-up capital. The framework establishes separate licensing categories for local and foreign-currency stablecoins, with issuers required to obtain approval for each token before offering it to customers.

The requirements cover cryptocurrency businesses operating in Nigeria, companies targeting Nigerian customers from overseas, and services that could affect the country’s payments system or foreign exchange market.

Nigeria requires ₦15 billion capital for foreign stablecoin issuers

Under the regulations, foreign-currency stablecoins fall into the Class 2 category, while tokens tied to the Nigerian naira fall under Class 1.

Companies seeking to issue dollar-backed or other foreign-currency stablecoins must establish a Nigerian-incorporated entity and secure a Foreign Currency Issuer Licence from the CBN.

The central bank requires Class 2 issuers to maintain at least ₦15 billion in paid-up capital throughout their operations. Class 1 issuers face a lower requirement of ₦10 billion, although the regulator can demand higher amounts depending on the company’s activities and risk profile.

Foreign companies cannot rely solely on licenses obtained in other jurisdictions or agreements with Nigerian intermediaries to meet these requirements. Each issuer must obtain the necessary local authorization before making its tokens available to Nigerian customers.

Beyond company licensing, the CBN requires separate written approval for every stablecoin. Applications must identify the token’s reference currency, reserve arrangements, name, ticker and supported blockchain networks.

Businesses offering other regulated virtual asset services face a minimum capital requirement of ₦1 billion. Where a company already holds a Securities and Exchange Commission license, the CBN requirement applies separately from the capital demanded by the securities regulator.

The CBN did not respond to a request for comment from crypto.news by press time.

The licensing rules arrive as Nigeria examines how stablecoins are increasingly used for payments, savings and international transfers.

As crypto.news previously reported, the International Monetary Fund warned in June that growing stablecoin adoption could create challenges for Nigeria’s monetary policy and foreign exchange management.

Central bank bans algorithmic stablecoins and requires full reserves

The CBN has prohibited algorithmic stablecoins that depend primarily on adjustments to token supply or demand to maintain their value without adequate reserve backing.

The restrictions cover other arrangements, including tokens tied to fiat currencies but backed mainly by cryptocurrencies, as well as stablecoins that do not provide holders with an enforceable right to redemption at face value.

Tokens issued by sanctioned entities or those operating from sanctioned jurisdictions are prohibited under the same framework.

For approved stablecoins, issuers must hold eligible reserve assets sufficient to cover the full value of outstanding tokens. The regulations require continuous one-to-one backing and prohibit companies from creating new tokens before receiving the corresponding reserve assets.

Issuers must maintain an additional reserve buffer of at least 2% of the value of stablecoins in circulation. The CBN requires daily checks of reserves against outstanding token liabilities, with restrictions on how companies can hold and use the backing assets.

The framework further requires customer identity verification, sanctions screening and transaction monitoring. Operators must follow anti-money laundering and counter-terrorist financing rules, including Travel Rule obligations covering qualifying virtual asset transfers.

In September, Tether announced plans to work with Shiga on self-custodial wallet services for customers across Africa and the Gulf region. Shiga said its Nigerian Digital Asset Intermediary license remained subject to final approval.

Existing crypto operators get 180 days to seek approval

Companies already providing regulated virtual asset services have 180 calendar days from the regulations’ commencement to apply for the appropriate license or authorization.

However, the transition period carries several conditions. Existing operators must register with the CBN within 30 days and begin supervisory reporting within 60 days, unless the regulator requires an earlier reporting date.

Businesses must comply with anti-money laundering requirements from the commencement date and cannot expand beyond their existing operating scale during the transition without the necessary approvals.

Operators that fail to submit a complete application within the permitted period must stop the regulated activities until they obtain authorization.

The CBN retains responsibility for stablecoins and virtual assets used in payments, transfers, remittances, foreign exchange and settlement. Nigeria’s Securities and Exchange Commission continues regulating securities, investment products and other capital-market activities.

Companies operating across both areas must obtain the approvals required by each regulator.

Nigeria had previously moved toward regulated naira stablecoins, with the cNGN stablecoin project receiving approval for a regulatory sandbox pilot in January 2024.

Under the new framework, the CBN can impose penalties on firms conducting regulated activities without authorization, including a minimum ₦100 million fine and an additional minimum ₦1 million for each day the violation continues.