Central Bank of Nigeria requires stablecoin licenses, 10-15 billion naira capital

Scope and reach

• The framework covers issuance and movement of non-security virtual assets: stablecoins, payment services, custody, transfers and remittances.
• Applies to activities conducted in or from Nigeria, directed at Nigerian residents, or that materially affect Nigerian payment and financial systems.
• Physical absence from Nigeria does not ensure exemption, which affects cross-border stablecoin platforms that target Nigerian users.
• The central bank’s remit covers payments and non-security tokens. Investment-like tokens can trigger separate oversight by the Nigerian securities regulator.

Two stablecoin classes and licensing

• Class 1: naira-referenced stablecoins. Minimum paid-up capital: 10 billion naira. The central bank can prescribe higher amounts.
• Class 2: foreign-currency-referenced stablecoins. Minimum paid-up capital: 15 billion naira. The central bank can prescribe higher amounts.
• Each token requires separate approval. Required disclosures include reserve composition, redemption processes, supported networks, governance and risk management.

Backing, redemption and design constraints

• Rules emphasise eligible reserve assets and dependable redemption.
• Restrictions apply to algorithmic arrangements that rely primarily on market mechanisms instead of eligible reserves to maintain value.
• Issuers must demonstrate capacity to honour redemptions and safeguard assets during stress.

Compliance and operational obligations

• Anti-money-laundering checks, sanctions screening and transaction monitoring are mandatory.
• Safeguarding of customer assets and clear disclosures on fees and risks are required.
• Local presence and possible local incorporation may be necessary for platforms actively serving Nigeria.
• Transitional provisions exist for current operators. Firms must consult the official text to determine deadlines and authorisation needs.

Market implications

• Regulatory clarity supports payments innovation under defined safeguards but imposes high compliance and capital costs, especially for smaller firms.
• A token can continue to exist on-chain while platform availability varies by jurisdiction, as seen with Coinbase restrictions on specific stablecoins in the European Economic Area. The legal classification of a token matters more than the marketing term crypto.
• User outcomes depend on dependable redemption, transparent fees and practical cross-border access. Issuer outcomes depend on meeting reserve and governance standards while preserving workable unit economics.

Reference: Central Bank of Nigeria circular and regulations dated November 5. Official document: Regulations for the Operations of Non-Security Virtual Assets in Nigeria.