The Central Bank of Nigeria (CBN) has introduced a framework requiring stablecoin issuers to obtain licenses and meet minimum capital thresholds, extending mandatory authorization rules to other virtual asset service providers (VASPs) as well. The framework covers non-security virtual assets and sets minimum capital of N10 billion for issuers of naira-pegged stablecoins and N15 billion for issuers of foreign-currency stablecoins, while other VASPs covered by the regulations face a minimum capital requirement of N1 billion.

CBN Sets Capital and Reserve Requirements

Under the new framework, stablecoins are divided into two categories. Class 1 covers tokens pegged to the Nigerian naira, while Class 2 includes tokens referenced to foreign currencies such as the US dollar. The classification determines how much capital issuers must maintain: Class 1 operators are required to hold at least N10 billion in minimum capital, while Class 2 issuers must meet a higher threshold of N15 billion.

Beyond capital, issuers must maintain reserves covering at least 100% of their stablecoin liabilities in eligible assets, with an additional 2% buffer. The reserve rules are intended to support the value and redemption obligations attached to the tokens.

Holders must be able to redeem stablecoins at par value, generally by the next business day. Issuers must therefore provide a redemption mechanism that allows customers to exchange their tokens for the referenced value under the framework's requirements. Taken together, the capital, reserve, and redemption rules are structured around a single objective: keeping the par-value promise attached to each token reliably redeemable.

Algorithmic Stablecoins and Certain Backing Models Prohibited

The CBN has prohibited algorithmic stablecoins, which rely on code and market incentives rather than conventional reserve backing to maintain their price peg. The framework also bars fiat-referenced tokens whose backing consists primarily of other virtual assets. In practical terms, that leaves traditionally reserved issuance — backed by conventional assets rather than crypto collateral or incentive mechanisms — as the compliant structure under Nigeria's regime.

Foreign-currency stablecoins face an additional access requirement. Issuers can serve Nigerian users only through locally licensed entities, meaning foreign intermediaries alone will not satisfy the framework's conditions. International stablecoin providers seeking access to the Nigerian market will therefore need to work with a locally licensed partner or establish their own local presence that meets the applicable requirements.

New Compliance Rules for P2P Transactions

The regulations also address peer-to-peer cryptocurrency activity. Platforms facilitating P2P transactions must apply enhanced identity verification measures, adding further compliance responsibilities for service providers operating in the market.

Existing operators are subject to transition deadlines. Businesses already active when the regulations take effect must register with the CBN within 30 days, and will then have 180 days from the effective date to submit applications for the relevant licenses.

CBN and SEC Divide Digital Asset Oversight

The framework clarifies the regulatory responsibilities of Nigeria's two main financial authorities. The CBN will supervise non-security virtual assets used for payment and settlement purposes, while Nigeria's Securities and Exchange Commission retains oversight of digital assets classified as securities. The division separates payment-related virtual asset activities from products that fall within securities regulation. For issuers, a token's classification effectively determines which of the two authorities governs it.

Nigeria Moves Toward a Formal Stablecoin Licensing System

The November framework follows other regulatory developments during 2026. An executive order issued in mid-2026 established a Virtual Asset Council, while authorities also introduced an expansive regulatory sandbox designed to provide room for innovation while keeping digital asset activity consistent with monetary and financial stability objectives. The new licensing framework adds formal authorization and compliance requirements to that regulatory approach.

The move represents a shift from Nigeria's earlier, more restrictive stance toward digital assets. Rather than relying primarily on restrictions, the CBN is establishing a structured licensing regime intended to accommodate market activity while strengthening consumer protection and regulatory oversight.

The near-term milestones are now procedural: registration for businesses already operating in the market within 30 days, license applications within 180 days of the effective date, and decisions by international stablecoin providers on whether to partner with a local entity or build their own licensed presence to keep serving Nigerian users. Those deadlines mark the framework's transition from announcement to practical implementation.

Source: Crypto Briefing, reporting by Ethan Collins. Original article: Nigeria central bank stablecoin issuer licenses, via Hokanews.