Nigeria's central bank has opened a new licensing regime for stablecoins that would force foreign issuers such as Tether and Circle to operate through locally incorporated subsidiaries backed by at least ₦15 billion in paid-up capital, while barring algorithmic tokens outright.
The Central Bank of Nigeria's Regulations for the Operations of Non-Security Virtual Assets in Nigeria took effect on Nov. 5, 2026, and split stablecoins into two classes. Naira-referenced tokens fall under Class 1, which carries a ₦10 billion capital floor, while foreign-currency tokens such as USDT and USDC sit in Class 2 and face the higher ₦15 billion threshold. Other regulated virtual asset service providers must hold at least ₦1 billion.
The rules reach beyond Nigerian borders. They cover crypto businesses operating inside the country, companies abroad that target Nigerian customers, and services that could touch the payments system or the foreign exchange market. A license obtained in another jurisdiction, or an arrangement with a local intermediary, will not satisfy the requirement. Every token must also win separate written approval identifying its reference currency, reserve arrangements, name, ticker and supported blockchain networks.
Note: The CBN may require higher capital depending on a company's activities and risk profile.
"A foreign-currency-referenced stablecoin may be offered, marketed, distributed, exchanged, held in custody, redeemed or otherwise made available to persons in Nigeria only as a Class 2 Stablecoin issued through a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence (Class 2)," the framework states.
Reserve requirements are equally prescriptive. Issuers must hold eligible assets covering the full value of tokens in circulation at all times, and may not mint new tokens before the matching reserves arrive. Class 1 issuers must park at least a fifth of their reserve pool in a dedicated account at the central bank. Daily reconciliation of reserves against liabilities is mandatory, and issuers must build smart-contract controls capable of freezing transactions, blocking addresses and burning tokens.
The framework also draws a line against algorithmic designs. Tokens that lean primarily on supply or demand adjustments to hold their peg are prohibited, as are fiat-referenced coins backed mainly by other cryptocurrencies and tokens that give holders no enforceable right to redeem at face value. Tokens from sanctioned entities or jurisdictions are barred as well. Nigeria's move follows a June warning from the International Monetary Fund that rising stablecoin use could complicate the country's monetary policy and exchange-rate management.
Peer-to-peer trading, a popular route into crypto for Nigerians, escapes a blanket ban but gains tighter controls. Platforms that match orders, hold funds in escrow or settle payments need explicit central bank approval, and no standalone P2P license will be issued. Under Section 10.3.3, a platform cannot release or credit regulated tokens unless the name and Bank Verification Number on the naira payment account match the verified customer, a rule aimed at closing a gap where fiat payment and token delivery could go to different people. High-volume or advertised sellers are treated as business users subject to enhanced review, trade limits and reporting to the regulator.
Conversions between naira and Class 2 stablecoins on P2P platforms are prohibited without specific approval, which must be routed through authorized dealers. Private transfers between two individuals with no platform involvement fall outside the section.
Existing operators get 180 calendar days to apply for a license, with registration due within 30 days and supervisory reporting starting within 60 days. Anti-money-laundering obligations apply from day one, and firms cannot expand beyond their current scale during the transition. Those that fail to file a complete application must halt regulated activity until authorized. Trading without approval carries a minimum fine of ₦100 million plus at least ₦1 million for each day the breach continues.
Regulated stablecoins will not carry deposit insurance or offer interest for simply holding tokens. The Securities and Exchange Commission retains oversight of securities and investment products, and companies straddling both areas need approvals from each regulator. The central bank did not respond to a request for comment.
For Tether and Circle, the immediate question is whether Nigeria's market justifies the cost of a licensed subsidiary and the capital lock-up. Tether has already moved to deepen its African footprint, announcing in September a partnership with Shiga on self-custodial wallet services across Africa and the Gulf, with Shiga noting its Nigerian Digital Asset Intermediary license remained subject to final approval. Smaller local exchanges and P2P desks face the sharpest squeeze, since the ₦1 billion floor for other providers and the compliance build-out could push marginal players out. Nigeria has been laying groundwork for regulated naira tokens since the cNGN project entered a regulatory sandbox in January 2024, and the new framework effectively makes that path the only sanctioned route for stablecoin activity.
