Nigeria's central bank requires licenses for stablecoin issuers, bans algorithmic tokens
In brief
- Stablecoin issuers must hold a CBN license, meet minimum capital and maintain fully backed reserves.
- Capital minimums: N10 billion for naira-pegged issuers, N15 billion for foreign-currency-referenced issuers.
- Algorithmic stablecoins and tokens backed mainly by other virtual assets are prohibited.
- Existing operators must register within 30 days and apply for licenses within 180 days.
Two classes, two capital floors
The CBN didn't treat every stablecoin the same. Its framework splits stablecoins into Class 1 and Class 2: Class 1 covers tokens pegged to the naira, while Class 2 covers tokens referenced to foreign currencies such as the US dollar.
Capital floors follow that split. Class 1 issuers need minimum capital of N10 billion and Class 2 issuers need N15 billion, per the CBN framework as reported by Crypto Briefing. Other virtual asset service providers (VASPs) under the framework face a lighter N1 billion threshold.
Reserves are strict too. Stablecoins must hold at least 100% reserves in eligible assets plus a 2% buffer, and holders have to be able to redeem their tokens at par, generally by the next business day.
What's banned, and who can sell to Nigerians
Algorithmic stablecoins are out entirely.
That covers the kind that hold their peg through code and market incentives (instead of cash in a vault). The CBN also prohibited fiat-referenced tokens backed primarily by other virtual assets.
Foreign-currency stablecoins can reach Nigerian users only through locally licensed entities, and arrangements with foreign intermediaries don't satisfy that requirement. It's a meaningful line for offshore issuers. The rules also call for enhanced identity verification on peer-to-peer (P2P) transactions that platforms facilitate.
Deadlines and oversight
Existing operators must register with the CBN within 30 days of the regulations taking effect. They then have 180 days from that effective date to apply for the relevant license.
Oversight is divided between two regulators. The CBN oversees non-security virtual assets used for payments and settlements, while Nigeria's Securities and Exchange Commission keeps oversight of digital assets classified as securities.
The framework follows other moves this year. According to Crypto Briefing, an executive order in mid-2026 set up a Virtual Asset Council, and a regulatory sandbox was launched; the outlet said the sandbox was pitched as a way to encourage innovation while keeping activity in line with monetary and financial stability goals. Crypto Briefing described the new framework as replacing Nigeria's previous, more restrictive approach with a structured licensing system meant to balance innovation and consumer protection.
Frequently asked questions
How much capital do stablecoin issuers need under Nigeria's new framework?
Class 1 issuers (naira-pegged tokens) need minimum capital of N10 billion, and Class 2 issuers (tokens referenced to foreign currencies such as the US dollar) need N15 billion. Other virtual asset service providers under the framework face a minimum of N1 billion, according to Crypto Briefing.
Are algorithmic stablecoins allowed in Nigeria?
No. The CBN framework bans algorithmic stablecoins outright. It also prohibits fiat-referenced tokens backed primarily by other virtual assets.
Can foreign dollar stablecoins still be offered to Nigerian users?
Only through locally licensed entities. Under the framework, arrangements with foreign intermediaries don't satisfy the local licensing requirement.
How long do existing crypto operators in Nigeria have to comply?
Existing operators must register with the CBN within 30 days of the regulations taking effect. They then have 180 days from that effective date to apply for the relevant license.
