By Obah Sylva
The Central Bank of Nigeria (CBN) has introduced a new regulatory framework for stablecoins, deposit money tokens and other non-security virtual assets, requiring issuers to meet strict capital, reserve and licensing conditions as part of efforts to strengthen oversight of digital financial transactions in Nigeria.
Latest: CBN sets ₦15bn capital for foreign stablecoin issuers and ₦10bn for naira tokens (news report)
The 169-page document, titled Regulations for the Operations of Non-Security Virtual Assets in Nigeria, was released on November 5, 2026. Signed by Musa Jimoh, Director of the CBN’s Payments System Policy Department, the regulations establish a risk-based licensing and supervisory framework for virtual asset service providers operating in or targeting the Nigerian market.
Key Highlights
- Naira-backed stablecoin issuers must maintain a minimum paid-up capital of ₦10 billion.
- Foreign currency-backed stablecoin issuers face a minimum capital requirement of ₦15 billion.
- Other covered virtual asset service providers must maintain at least ₦1 billion in capital.
- Stablecoins must be fully backed by eligible reserve assets and carry an additional 2 per cent over-collateralisation buffer.
- Issuers must provide holders with an enforceable right to redeem stablecoins at par.
- Algorithmic stablecoins and certain inadequately backed tokens are prohibited.
- Foreign issuers targeting Nigeria must obtain local CBN authorisation.
- Platforms facilitating peer-to-peer transactions must comply with customer verification and BVN-matching requirements.
What the New CBN Stablecoin Regulations Cover
The regulations apply to non-security virtual assets, including tokens primarily used for payments, settlement and value transfer rather than investment securities.
Covered activities include the issuance and distribution of virtual assets, exchange and conversion services, custody, wallet operations, payments, remittances, clearing, settlement and platform-facilitated peer-to-peer (P2P) transactions.
The framework also applies to activities conducted in Nigeria, directed at Nigerian customers or capable of materially affecting the country’s payments system, financial system, foreign exchange market or financial stability.
This means that foreign-based virtual asset operators cannot rely solely on licences issued in other jurisdictions when providing services to Nigerians. They must obtain the relevant CBN authorisation where their activities fall within the regulations.
The Central Bank of Nigeria says the framework is intended to encourage responsible innovation, protect users against issuer insolvency and reserve mismanagement, strengthen monetary policy, monitor capital flows and enforce anti-money laundering and counter-terrorist financing requirements.
CBN Classifies Stablecoins and Deposit Money Tokens
The new framework classifies covered tokens according to their economic functions and underlying arrangements.
1. Naira-Referenced Stablecoins
Class 1 covers stablecoins linked to the naira. Issuers must maintain a strict one-to-one relationship between the tokens and eligible naira-denominated reserve assets.
The tokens may be used for payments, settlement, treasury management and incidental holding of balances. Issuers must maintain a minimum paid-up capital of ₦10 billion.
2. Foreign Currency-Referenced Stablecoins
Class 2 covers stablecoins linked to foreign currencies, including the US dollar.
These tokens may be used for cross-border payments, remittances and international trade settlement, subject to Nigeria’s foreign exchange regulations.
Issuers must be incorporated in Nigeria, obtain the appropriate CBN licence and maintain a minimum paid-up capital of ₦15 billion. Foreign incorporation or licensing alone does not exempt an operator from the requirements.
3. Deposit Money Tokens
Deposit Money Tokens (DMTs) are digital representations of existing bank deposit liabilities.
Only CBN-licensed deposit money banks or approved subsidiaries may issue them. Holders retain a direct claim against the issuing bank, while the tokens must correspond to actual naira deposits.
Unlike privately issued stablecoins, DMTs represent tokenised bank money within the regulated banking system.
4. Other Designated Tokens
The CBN may designate additional tokens for regulation where their activities fall within its responsibilities for payments, settlement, foreign exchange management or financial stability.
CBN Prohibits Algorithmic Stablecoins and Certain Tokens
The regulations prohibit certain categories of virtual assets from operating under the framework.
These include algorithmic stablecoins that depend mainly on supply-and-demand mechanisms rather than adequate reserve backing, tokens backed primarily by other virtual assets and tokens issued by sanctioned individuals or entities or from sanctioned jurisdictions.
The framework also prohibits instruments marketed as stablecoins where holders do not have an enforceable right to redeem them at par.
The restrictions are intended to reduce the risks associated with unstable backing arrangements and misleading claims about the value and redeemability of digital tokens.
Stablecoin Issuers Face Strict Capital and Reserve Requirements
The CBN has established minimum capital requirements for different categories of virtual asset operators.
Under the framework, the minimum requirements are:
- Class 1 naira-backed stablecoin issuers: ₦10 billion.
- Class 2 foreign currency-backed stablecoin issuers: ₦15 billion.
- Other covered virtual asset service providers, including exchanges, custodians, wallet providers and payment platforms: ₦1 billion.
The capital requirements are designed to ensure that operators have sufficient financial resources to meet their obligations and withstand operational or market pressures.
Stablecoin issuers must also maintain eligible reserve assets on a one-to-one basis with the tokens in circulation, alongside a mandatory 2 per cent over-collateralisation buffer funded from the issuer’s own resources.
Class 1 issuers must place at least 20 per cent of their reserve pool in a designated non-interest-bearing account with the CBN. The remaining reserves must comply with the prescribed requirements, including the use of high-quality liquid assets.
The regulations also require reserve assets to be segregated and give token holders priority claims over those assets in the event of issuer insolvency.
Holders Must Be Allowed to Redeem Stablecoins at Par
The framework gives stablecoin holders an enforceable right to redeem their tokens at par value.
Issuers are generally required to complete redemption by the end of the next business day, without imposing standard redemption fees.
They are also prohibited from paying interest, yields or other financial returns simply because customers hold stablecoins.
The CBN further makes clear that stablecoins must not be presented as bank deposits or marketed as products protected by the Nigeria Deposit Insurance Corporation (NDIC).
This distinction is important because stablecoins and traditional bank deposits carry different legal and financial protections.
New Licensing Rules for Crypto Exchanges, Wallet Providers and P2P Platforms
The regulations introduce licensing and authorisation requirements for existing and prospective virtual asset service providers.
Exchanges, custodians, wallet providers and payment platforms covered by the framework must obtain the relevant CBN approval before conducting regulated activities.
Platforms facilitating peer-to-peer transactions must also secure the specific authorisation required for such services. A licence to provide other virtual asset services does not automatically permit a platform to facilitate P2P trading.
Under the new rules, platforms supporting naira-based P2P transactions must verify that the name and Bank Verification Number (BVN) associated with a customer’s bank account match the customer’s verified identity before releasing tokens.
Third-party, nominee and so-called mule accounts are prohibited. The naira component of these transactions must also pass through approved Nigerian banking or payment channels.
Private transfers between individuals without platform intermediation fall outside this specific platform-related requirement. However, operators that match buyers and sellers, provide escrow services or facilitate settlement remain subject to the applicable rules.
Existing operators are generally expected to register within 30 days and apply for full authorisation within 180 days, subject to the applicable transitional provisions. The regulations also provide for penalties against operators that conduct regulated activities without the required approval.
Read also:
- CBN Introduces ₦15bn Capital Requirement for Foreign Stablecoin Issuers, Sets ₦10bn for Naira Tokens
- Nigeria’s New Crypto Tax Law Sparks Industry Backlash Over Transaction Taxes
- CBN Opens Applications for Second Cohort Of Regulatory Sandbox Programme
- CBN Strengthens Nigeria’s Economic Data Architecture By Digitalising Sub-National Fiscal Survey
How the New Rules Will Affect Ordinary Nigerians
The new CBN framework could change how Nigerians access, store and transfer digital money, particularly through stablecoins and tokenised bank deposits.
Greater protection for stablecoin holders: Mandatory reserve backing, asset segregation and redemption rights are intended to reduce the risk of issuers failing to honour their obligations. However, stablecoins are not bank deposits and are not covered by NDIC deposit insurance.
More formal digital payments: Licensed operators may be able to integrate regulated stablecoins and deposit money tokens into payment, remittance and settlement services. This could create additional options for individuals and businesses involved in domestic and international transactions.
Changes to cross-border transactions: Foreign currency-backed stablecoins may support international payments and trade settlement, but their use will remain subject to Nigeria’s foreign exchange regulations and other applicable requirements.
Stricter identity checks: BVN matching and stronger customer verification will make platform-facilitated P2P transactions more traceable. This could reduce the use of third-party accounts but may also increase transaction requirements for users.
Possible higher service costs: The substantial capital and compliance requirements could make it more difficult for smaller operators to remain in the market. Some providers may pass the cost of meeting the new requirements to customers.
For ordinary users, the framework provides a more clearly regulated route for holding and transferring digital value. However, the extent to which consumers benefit will depend on how effectively the rules are implemented and how many licensed providers remain in the market.
What the New Regulations Mean for Nigeria’s Digital Finance Sector
The CBN’s framework represents a major development in Nigeria’s approach to digital financial services.
By establishing minimum capital requirements, reserve standards, redemption obligations and licensing conditions, the regulator is seeking to bring stablecoin issuance and related payment activities within a formal supervisory structure.
The regulations also distinguish between privately issued stablecoins and deposit money tokens issued by regulated banks. This could create opportunities for banks and financial technology companies to explore blockchain-based payment and settlement services under regulatory oversight.
However, the framework does not amount to unrestricted approval of all cryptocurrencies or digital asset activities. Operators must comply with the relevant CBN requirements, while securities-related digital assets remain subject to the Securities and Exchange Commission’s regulatory authority.
As implementation progresses, the CBN is expected to publish a register of authorised issuers and service providers, giving consumers and businesses a means of identifying operators permitted to provide regulated services.
The success of the framework will depend on effective enforcement, clear regulatory guidance and the ability of financial institutions and technology companies to develop services that comply with the new requirements.
For Nigerians, the regulations could widen access to regulated digital payment options while introducing stricter controls over how virtual assets are issued, traded and transferred.
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