Nigeria's central bank bans algorithmic stablecoins under new crypto licensing rules
In brief
- Central Bank of Nigeria issued its Non-Security Virtual Assets regulations Thursday, Cointelegraph reported.
- Algorithmic stablecoins and tokens without enforceable redemption rights are banned.
- Stablecoin issuers need full reserve backing, a 2% buffer and at least 40% liquid reserves.
- Existing operators have 180 days to apply for licenses or authorizations.
What the rules require
Stablecoin issuers have to fully back their tokens with reserve assets and hold an extra buffer of at least 2% of their value, according to Cointelegraph's account of the regulations. At least 40% of those reserves must be cash or qualifying highly liquid assets.
The capital floors are high. Naira-backed issuers need minimum paid-up capital of 10 billion naira (roughly $7.4 million, per Cointelegraph's conversion), while foreign currency-backed stablecoin issuers need 15 billion naira (about $11.1 million). Companies offering payment-related crypto services, including exchange and custody, have to keep at least 1 billion naira (approximately $742,000).
The regulations also prohibit stablecoins that rely mainly on algorithms rather than eligible reserves to hold their value. Tokens that don't come with enforceable redemption rights are out too.
The ban took effect immediately.
The CBN said the framework is meant to support responsible innovation while protecting consumers and financial stability.
How Nigeria got here
The rules followed a July executive order from President Bola Tinubu that sought to coordinate crypto oversight among Nigerian authorities without changing their existing powers. Cointelegraph described the country as one of Africa's largest crypto markets.
Nigeria previously took a restrictive approach to crypto trading (limiting banking access for exchanges and seeking to restrict peer-to-peer trading in local currency). Binance discontinued its naira services in March 2024 amid government scrutiny of crypto trading and currency-manipulation allegations raised by Nigerian authorities. Those same authorities detained Binance executive Tigran Gambaryan for nearly eight months before dropping money laundering charges against him in October 2024.
Tax rules came first
The CBN isn't the only regulator moving. Nigeria's revenue agency introduced crypto tax collection rules for digital asset platforms and peer-to-peer marketplaces in August 2026, and the new licensing regime now sits on top of that. For exchanges, custodians and payment providers already operating in the country, the 180-day clock to apply for a license or authorization has started.
Frequently asked questions
Which stablecoins does Nigeria's new regulation ban?
According to Cointelegraph, the Central Bank of Nigeria's regulations prohibit stablecoins that rely mainly on algorithms rather than eligible reserves to hold their value. Tokens without enforceable redemption rights are also banned.
What reserves must stablecoin issuers in Nigeria hold?
Issuers have to fully back their tokens with reserve assets and keep an additional buffer of at least 2% of their value, Cointelegraph reported. At least 40% of reserves must be cash or qualifying highly liquid assets.
How long do existing crypto operators in Nigeria have to get licensed?
The regulations took effect immediately, but existing operators have 180 days to apply for licenses or authorizations, according to Cointelegraph's account of the CBN rules.
