The Central Bank of Nigeria (CBN) has introduced a licensing framework requiring stablecoin issuers to obtain regulatory approval, maintain substantial minimum capital and fully backed reserves. The rules, announced on November 5, 2026, also prohibit algorithmic stablecoins and establish separate requirements for tokens pegged to the naira and foreign currencies.
The framework covers non-security virtual assets and introduces minimum capital thresholds of N10 billion for naira-pegged stablecoin issuers and N15 billion for issuers of foreign-currency stablecoins. Other virtual asset service providers (VASPs) covered by the regulations face a minimum capital requirement of N1 billion.
CBN Sets Capital and Reserve Requirements
Under the new framework, stablecoins are divided into two categories. Class 1 covers tokens pegged to the Nigerian naira, while Class 2 includes tokens referenced to foreign currencies, such as the US dollar.
The different classifications determine how much capital issuers must maintain. Class 1 operators are required to hold at least N10 billion in minimum capital, while Class 2 issuers must meet a higher threshold of N15 billion.
Beyond capital requirements, issuers must maintain reserves covering at least 100% of their stablecoin liabilities in eligible assets, with an additional 2% buffer. The reserve rules are intended to support the value and redemption obligations attached to the tokens.
Holders must be able to redeem stablecoins at par value, generally by the next business day. This means issuers must provide a redemption mechanism that allows customers to exchange their tokens for the referenced value under the framework's requirements.
Algorithmic Stablecoins and Certain Backing Models Prohibited
The CBN has prohibited algorithmic stablecoins, which rely on code and market incentives rather than conventional reserve backing to maintain their price peg.
The framework also bars fiat-referenced tokens whose backing consists primarily of other virtual assets. These restrictions establish limits on the types of stablecoin structures that can operate under the Nigerian regulatory regime.
Foreign-currency stablecoins face an additional access requirement. Issuers can serve Nigerian users only through locally licensed entities, meaning foreign intermediaries alone will not satisfy the framework's conditions.
International stablecoin providers seeking access to the Nigerian market will therefore need to work with a locally licensed partner or establish their own local presence that meets the applicable requirements.
New Compliance Rules for P2P Transactions
The regulations also address peer-to-peer cryptocurrency activity. Platforms facilitating P2P transactions must apply enhanced identity verification measures, adding further compliance responsibilities for service providers operating in the market.
Existing operators are subject to transition deadlines. Businesses already active when the regulations take effect must register with the CBN within 30 days. They will then have 180 days from the effective date to submit applications for the relevant licenses.
CBN and SEC Divide Digital Asset Oversight
The framework clarifies the regulatory responsibilities of Nigeria's two main financial authorities. The CBN will supervise non-security virtual assets used for payment and settlement purposes.
Nigeria's Securities and Exchange Commission will retain oversight of digital assets classified as securities. The division separates payment-related virtual asset activities from products that fall within securities regulation.
Nigeria Moves Toward a Formal Stablecoin Licensing System
The November framework follows other regulatory developments during 2026. An executive order issued in mid-2026 established a Virtual Asset Council, while authorities also introduced an expansive regulatory sandbox.
The sandbox was designed to provide room for innovation while keeping digital asset activity consistent with monetary and financial stability objectives. The new licensing framework adds formal authorization and compliance requirements to that regulatory approach.
The move represents a shift from Nigeria's earlier, more restrictive stance toward digital assets. Rather than relying primarily on restrictions, the CBN is establishing a structured licensing regime intended to accommodate market activity while strengthening consumer protection and regulatory oversight.
source: cryptobriefing
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.