CBN brings stablecoins, virtual asset operators under licensing regime
By Anthony Isibor
THE Central Bank of Nigeria, CBN, has introduced a licensing and regulatory framework for stablecoin issuers, digital tokens issued by deposit money banks and businesses providing virtual asset payment services in Nigeria.
The framework is contained in the Regulations for the Operations of Non-Security Virtual Assets in Nigeria, issued and signed by the CBN. The regulations will commence on 5th November.
Under the new regulations, the apex bank requires entities involved in issuing, distributing, exchanging, converting, transferring, holding and settling regulated virtual assets to obtain the relevant licences or authorisations.
The framework classifies stablecoins into two categories: naira-referenced stablecoins (Class 1) and foreign currency-referenced stablecoins (Class 2).
Class 1 stablecoins are designed to maintain a one-to-one value with the naira and must be backed by eligible naira-denominated reserve assets. Their issuers must obtain a Naira-Referenced Issuer Licence from the CBN.
Class 2 stablecoins, which maintain their value against foreign currencies, require a Foreign Currency Issuer Licence.
The guidelines also introduce Deposit Money Tokens, DMTs, which are digital tokens issued by deposit money banks and represent direct claims on the issuing banks. Each token must correspond to an existing naira-denominated deposit liability, with the issuing bank remaining responsible for the underlying deposit claim.
The CBN’s regulatory requirements extend to virtual asset exchanges, conversion platforms, wallet providers, custodians, payment gateways, merchant-acquiring businesses, remittance operators and companies providing clearing and settlement services.
Businesses involved in managing reserve assets backing stablecoins and operating payment or settlement infrastructure are also covered.
The framework distinguishes between custodial and non-custodial wallets. Custodial wallet providers hold or control customers’ virtual assets or the private keys required to access them. Non-custodial wallet providers, however, cannot independently control or transfer customers’ assets because the customers retain sole control of their private keys.
Foreign virtual asset operators are not exempt from the requirements simply because they have no physical presence in Nigeria. The regulations apply to activities carried out in or from Nigeria, directed at Nigerian customers, or involving tokens marketed, distributed or made available to persons in the country.
Foreign issuers whose tokens are admitted to the Nigerian market must also comply with the applicable incorporation, licensing and authorisation requirements.
The CBN will determine whether a token or business activity falls within its regulatory jurisdiction based on its economic function and risk characteristics, rather than the name or description given to it by its operator.
The guidelines further require regulated virtual asset service providers to comply with anti-money laundering, counter-terrorist financing and counter-proliferation financing obligations.
These include Know Your Customer, KYC, Customer Due Diligence, CDD, ongoing transaction monitoring, suspicious transaction reporting and applicable Travel Rule requirements.
The regulations also seek to address risks associated with stablecoin issuance, including inadequate reserves, mismanagement of backing assets, issuer insolvency, fraud and refusal to redeem tokens.
However, the framework excludes virtual assets classified as securities, investment contracts and other capital market products regulated by the Securities and Exchange Commission, SEC.
Electronic money and stored-value products already regulated under existing payment system laws are also excluded, unless changes to their functionality bring them within the new framework.
Other exclusions include central bank digital currencies, conventional bank liabilities that do not qualify as deposits or Deposit Money Tokens, and loyalty points, vouchers and rewards restricted to limited networks that cannot be exchanged for money or transferred to third parties.
The CBN said the framework was designed to regulate virtual asset activities while protecting consumers, preserving monetary policy effectiveness, monitoring capital flows and safeguarding the stability of Nigeria’s financial system.
A.I
Nov. 6, 2026
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