Introduction

The Central Bank of Nigeria has unveiled a new regulatory framework governing stablecoin issuers, virtual asset service providers, and peer-to-peer transactions involving digital assets. The framework aims to bring greater oversight to the rapidly growing crypto ecosystem while safeguarding the integrity of the national payments system.

What Happened

Effective November 5, 2026, the CBN requires all foreign-currency stablecoin issuers to establish Nigerian-incorporated entities and obtain a Class 2 Foreign Currency Issuer Licence before offering tokens to Nigerian users. The regulations also introduce a formal framework for peer-to-peer naira-dollar conversions, mandating CBN approval and settlement through authorised foreign exchange dealers. Key provisions include foreign issuers must obtain local licences and cannot rely on approvals from other jurisdictions; P2P transactions involving dollar-backed stablecoins require express CBN approval and must route through designated dealers; naira-referenced stablecoins (Class 1) require a minimum paid-up capital of N10 billion; foreign-currency stablecoins (Class 2) require a minimum of N15 billion in paid-up capital.

Why This Matters

The new rules signal the CBN's intent to formalize a sector that has operated largely outside traditional financial oversight. By imposing capital floors, reserve requirements, and strict anti-evasion measures, the central bank seeks to protect financial stability, prevent money laundering, and ensure that stablecoin activity does not undermine the naira or the broader foreign exchange market. Systemic designation may apply to stablecoins with a naira-equivalent circulating supply exceeding N500 billion daily for 30 consecutive days, or those used by more than five million Nigerians. The CBN will have unrestricted supervisory access to issuer records, reserve arrangements, and group-level information.

Key Takeaways

  • Class 1 stablecoin issuers must hold at least 20% of reserves as a cash deposit with the CBN, earning no interest.
  • All stablecoin issuers are prohibited from paying interest, yields, or dividends to token holders.
  • Unlicensed virtual asset activities face a minimum fine of N100 million, plus N1 million per day of continued violation.
  • Breaches of capital, reserve, or liquidity requirements attract penalties ranging from N50 million to N250 million.
  • Stablecoins are not bank deposits and are not covered by the Nigeria Deposit Insurance Corporation.

Conclusion

Nigeria's new stablecoin framework represents a significant step toward regulated digital asset integration, balancing innovation with consumer protection and financial stability. Industry participants must secure the appropriate licences, meet capital and reserve thresholds, and comply with strict reporting and foreign exchange oversight requirements to operate legally in the Nigerian market.