In brief
- The Central Bank of Nigeria (CBN) requires foreign-currency stablecoin issuers to have a Nigerian-incorporated entity, a licence and ₦15 billion in paid-up capital (about $11.16 million).
- Naira-referenced stablecoins (Class 1) need ₦10 billion, and other non-security virtual asset providers ₦1 billion.
- Foreign approvals do not exempt issuers, and algorithmic stablecoins are prohibited.
The Central Bank of Nigeria (CBN) has issued a new framework for non-security virtual assets. It requires foreign-currency stablecoin issuers to operate through a local entity and hold at least ₦15 billion in paid-up capital. It matters because it affects Africa’s largest digital economy and the most widely used stablecoins.
What the framework provides
According to Nigerian business media, the regulations were issued under a circular dated 5 November 2026 and cover issuance, payments, custody and transfers of virtual assets. Foreign-currency issuers (Class 2) must set up locally incorporated, licensed entities to offer or distribute their tokens to Nigerian users. Issuers such as Tether (USDT) and Circle (USDC) fall within this. The CBN states that approvals obtained abroad do not exempt them from Nigerian licensing, capital, reserve and operational requirements.
The thresholds are tiered. Naira-referenced stablecoins (Class 1) require ₦10 billion, and exchanges, wallet providers and other service providers need ₦1 billion. Capital must be held on entry and continuously, and cannot also be counted towards the requirements of Nigeria’s Securities and Exchange Commission (SEC). The CBN may demand more capital depending on risk.
Reserves and limits
According to BigGo Finance, Class 2 tokens must be backed at 100% plus a 2% buffer. Class 1 requires 100% backing, with at least 20% held on deposit at the CBN. The minimum capital is separate from the assets backing coins already in circulation. Algorithmic stablecoins are also prohibited.
Early reactions
The industry has broadly welcomed stronger oversight and local accountability. However, concerns have been raised that the cost of capital could disadvantage local issuers running fully reserved models.
Our view at CEA Digital Law
For the Euro-American Committee of Digital Law - CEA Digital Law, Nigeria has chosen mandatory local presence, closer to the authorisation logic of the EU’s MiCA Regulation (which requires authorised issuers in the Union) than to simple registration. Its strength is clarity: classes, capital, reserves and a ban on algorithmic models.
Open questions remain. One is proportionality: a single threshold may deter small African issuers with fully reserved models. Another is coordination with the SEC, so that the dual capital requirement does not create duplication. A third is the transition period for platforms already distributing these tokens to users in Nigeria. We suggest that regulators in Africa and Latin America and the Caribbean who are weighing similar frameworks consider graduated thresholds, transition guidance and open dialogue with industry before setting their figures.
Sources
CEA Digital Law
Lettre d’information
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