Nigeria’s Central Bank Imposes New Crypto Licensing Rules

Ban on algorithmic stablecoins and reserve mandates

The new regulations explicitly prohibit the use of algorithmic stablecoins that rely on market dynamics or token supply adjustments to maintain value. Issuers are now required to use eligible reserves to back their tokens.

The CBN has banned tokens that lack enforceable redemption rights or those tied to fiat currencies but backed by other cryptocurrencies.

Capital requirements for stablecoin issuers and providers

The CBN has established distinct licensing categories for stablecoins based on their reference currency. Issuers of foreign-currency stablecoins, classified as Class 2, are required to maintain a minimum of ₦15 billion ($11.1 million) in paid-up capital.

Issuers of naira-backed stablecoins, designated as Class 1, must hold at least ₦10 billion ($7.4 million) in paid-up capital. Other regulated virtual asset providers, including exchange and custody services, are subject to a separate minimum paid-up capital requirement of ₦1 billion ($742,000).

These capital requirements for other providers apply independently of any mandates enforced by the Securities and Exchange Commission.

Operational and reserve backing standards

Stablecoin issuers must maintain one-to-one reserve backing for all tokens in circulation. They must also hold an additional reserve buffer equal to at least 2% of the token's value.

Issuers must secure written approval for every token, detailing its ticker, name, classification, and supported blockchain networks. Companies issuing foreign-currency stablecoins must form a Nigerian-incorporated entity and obtain a Foreign Currency Issuer Licence.

These foreign-currency assets are distributed as Class 2 tokens. This includes transaction monitoring, sanctions screening, and customer due diligence.

Regulatory oversight and enforcement authority

The Central Bank of Nigeria retains authority over virtual assets and stablecoins used for payments, remittances, and foreign exchange. The Securities and Exchange Commission regulates securities and investment products.

Firms operating in both sectors must secure approvals from both regulators. The framework separates financial and security activities.

The Central Bank of Nigeria stated the framework aims to protect consumers and financial stability while supporting responsible innovation. These rules apply to any virtual asset activity conducted in Nigeria or directed at Nigerian users.

This applies even if the operator lacks a physical presence in the country. Firms operating without authorization face a minimum fine of ₦100 million.

Compliance timeline for existing operators

The new regulations took effect immediately on November 5, 2026. Existing operators have 180 calendar days from the commencement of the rules to apply for the necessary license or authorization.

Crypto.news reported that these businesses must complete registration with the Central Bank of Nigeria within 30 days of the regulations taking effect. Firms are required to begin supervisory reporting within 60 days of the commencement.

Context of Nigerian crypto regulation

This regulatory framework follows an executive order issued by President Bola Tinubu in July 2026 to coordinate crypto oversight among Nigerian authorities.

These developments follow earlier government scrutiny, including the discontinuance of Binance's Nigerian naira services in March 2024.