Key Facts

  • The Central Bank of Nigeria issued regulations for non-security virtual assets that ban algorithmic stablecoins and tokens referencing a fiat currency but backed mainly by other virtual assets.

  • The rules create separate issuer licences for naira-referenced stablecoins and foreign-currency stablecoins, each issued only by holders of the matching licence.

  • Issuers may not pay interest, yield or other returns to holders, holders get an absolute right of redemption at par, within a maximum of one business day, and existing operators have 180 days from commencement to apply for a licence.

The Central Bank of Nigeria issued regulations for non-security virtual assets that ban algorithmic stablecoins and tokens referencing a fiat currency but backed mainly by other virtual assets.

The rules create separate issuer licences for naira-referenced stablecoins and foreign-currency stablecoins, each issued only by holders of the matching licence.

Issuers may not pay interest, yield or other returns to holders, holders get an absolute right of redemption at par, within a maximum of one business day, and existing operators have 180 days from commencement to apply for a licence.

The Central Bank of Nigeria has banned algorithmic stablecoins and set up a licensing regime for stablecoin issuers and other virtual asset service providers, under regulations dated Nov. 5.

"An issuer shall not pay, offer, arrange or facilitate interest, yield, dividends, returns or other financial benefits to holders by reason of holding or depositing its stablecoin," the regulations say.

Which Tokens Are Banned

Naira and Foreign-Currency Licences

Class 1 coins must be issued by a Class 1 licensed issuer, and Class 2 coins only by a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence. Holders have an absolute right of redemption at par, with a maximum timeline of one business day.

Existing operators must apply for a licence or authorisation within 180 calendar days of the rules taking effect. Operating without a licence carries a fine of at least ₦100 million plus at least ₦1 million a day, and paying yield to holders carries a fine of twice the amount paid.