The Central Bank of Nigeria (CBN) has officially enacted the ‘Regulations for the Operations of Non-Security Virtual Assets’ starting November 5, 2026. Nigeria’s monetary authority has banned the circulation of algorithmic stablecoins that maintain their value solely through supply-and-demand adjustments without adequate real asset reserves. The CBN also prohibited fiat-denominated stablecoins backed primarily by crypto assets, as well as tokens lacking enforceable redemption rights at par value. These provisions immediately limit the instruments permitted to circulate in the market.
Who Is Affected by the Ban
The new rules divide stablecoin issuers into two licensing tiers with distinct capital requirements. Class 2 issuers minting foreign currency-denominated stablecoins must be locally incorporated in Nigeria and provide a minimum paid-up capital of ₦15 billion, equivalent to roughly $11.1 million. For naira-based Class 1 issuers, the minimum paid-up capital is set at ₦10 billion, or around $7.4 million. Companies are also barred from issuing multiple assets at once, as the CBN mandates separate written approval for every token offered to customers in Nigeria.
Every approved stablecoin must be fully backed 1:1 by reserve assets, plus a reserve buffer of at least 2% of the total circulating value of the token. The regulator requires at least 40% of the reserve assets to be held in cash or high-quality liquid assets. To maintain collateral sufficiency, issuers are also required to conduct daily verifications of their circulating token liabilities.
180-Day Deadline for Existing Players
Capital requirements do not stop at token issuers. Crypto-related payment service providers, exchanges, and custodial providers must hold a minimum paid-up capital of ₦1 billion, or around $742,000. That figure applies to all entities managing the custody or execution of digital asset transactions.
For crypto businesses already operating in Nigeria prior to these regulations, the central bank has established a 180-day window to apply for an official license. This timeframe gives exchanges and payment intermediaries leeway to arrange compliance documentation and satisfy capital requirements.
The compliance framework mandates Know Your Customer (KYC) identity verification, Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) monitoring, and adherence to the Travel Rule for cross-platform asset transfers. These provisions require crypto industry players to operate under banking-grade compliance standards.
For crypto users in Nigeria, the tightening offers assurance that their tokens are backed by real cash reserves, though algorithmic stablecoins and undercapitalized projects will be promptly sidelined from regulated exchanges.
Reported by Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
