Nigeria bans algorithmic stablecoins under new crypto rules

Key points

Nigeria’s Central Bank has introduced new rules for non-security virtual assets, including a ban on algorithmic stablecoins.
The framework establishes licensing requirements for stablecoin issuers and virtual asset service providers.
Existing operators have 180 days from commencement to apply for the required licences or authorisations.

Nigeria’s Central Bank has prohibited algorithmic stablecoins and introduced licensing rules for digital asset businesses operating in the country.

The framework covers stablecoin issuance, exchanges, custody, wallets, transfers, payment services and settlement infrastructure.

The rules require businesses conducting regulated virtual asset activities to obtain the appropriate Central Bank licence or authorisation.

The ban covers algorithmic stablecoins and tokens backed primarily by other virtual assets rather than eligible reserve assets.

Stablecoins must provide full reserve backing and enforceable redemption rights, while issuers face additional reserve and reporting requirements.

Existing operators must register within 30 days and apply for the appropriate licence within 180 days of commencement.

The Central Bank can impose operating restrictions, supervise compliance and take enforcement action against businesses handling prohibited tokens.

The framework places Nigeria’s stablecoin and virtual asset payment activities under direct Central Bank supervision.