Cryptoupdated 36m ago2 min read
Nigeria’s CBN Sets ₦10B–₦15B Stablecoin Capital Rules, Bans Algorithmic Tokens
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CBN bans algorithmic stablecoins nationwide. Foreign-currency issuers must hold ₦15B; naira-backed issuers ₦10B.
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CBN bans algorithmic tokens
Nigeria’s Central Bank of Nigeria introduced the Regulations for the Operations of Non-Security Virtual Assets on Thursday, setting licensing and reserve requirements for stablecoin issuers and other covered service providers. The rules took effect immediately, and the CBN gave existing operators 180 days to apply for licenses or authorizations. The CBN required stablecoin issuers to fully back their tokens with reserve assets and to maintain an additional buffer equal to at least 2% of their value.
The CBN also prohibited stablecoins that rely primarily on algorithms rather than eligible reserves to maintain their value, and it barred tokens that lack enforceable redemption rights. The CBN set minimum paid-up capital of 10 billion naira ($7.4 million) for naira-backed issuers and 15 billion naira ($11.1 million) for foreign currency-backed stablecoin issuers, while requiring payment-related crypto service providers to maintain minimum paid-up capital of 1 billion naira ($742,000).
Capital floors and token approvals
The Central Bank of Nigeria created separate licensing categories for naira-referenced and foreign-currency-referenced stablecoins, and the framework required issuers to obtain approval for each token before beginning issuance. The CBN required foreign-currency stablecoins to be offered, distributed, exchanged, or otherwise made available to Nigerians as Class 2 tokens issued through a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence. The CBN required Class 2 issuers to maintain at least ₦15 billion in paid-up capital throughout their operations, while Class 1 issuers faced a lower requirement of ₦10 billion.
The CBN required each issuer to obtain necessary local authorization before making its tokens available to Nigerian customers, and it required separate written approval for every stablecoin. The CBN also required applications to identify the token’s reference currency, reserve arrangements, name, ticker and supported blockchain networks.
Scope, compliance, and deadlines
The CBN said the rules cover virtual asset activities conducted in Nigeria, directed at Nigerian users, or affecting the country’s payments system, financial sector, or foreign exchange market even if an operator has no physical presence in the country. The CBN enforced anti-money laundering and counter-terrorist financing obligations, and it required customer due diligence, sanctions screening, transaction monitoring, and Travel Rule compliance across custodial wallets, peer-to-peer services, and remittance channels. The framework gave existing operators 180 days to apply for the appropriate licence or authorization, and it required transitional steps including registration within 30 days and supervisory reporting within 60 days.
The CBN also required daily checks of reserves against outstanding token liabilities and prohibited companies from creating new tokens before receiving the corresponding reserve assets. The CBN retained responsibility for stablecoins and virtual assets used for payments, transfers, remittances, foreign exchange and settlement, while the Securities and Exchange Commission retained oversight of securities and capital-market activities.