Nigeria central bank sets new crypto licensing rules, bans algorithmic stablecoins
Regulations require stablecoin issuers to maintain reserve buffers, set capital minimums, and give existing operators 180 days to apply for licenses or authorizations
Nigeria's central bank has introduced new licensing and reserve requirements for cryptocurrency companies, tightening oversight of stablecoins and digital asset payment services in one of Africa's largest crypto markets.
The Central Bank of Nigeria (CBN) issued the Regulations for the Operations of Non-Security Virtual Assets on Thursday, establishing rules for stablecoin issuers, crypto payment providers, exchanges, custodians and other covered service providers. The regulations took effect immediately, though existing operators have 180 days to apply for licenses or authorizations.
The CBN said the framework aims to support responsible innovation while protecting consumers and financial stability. The move follows President Bola Tinubu's July executive order, which sought to coordinate crypto oversight among Nigerian authorities without changing their existing powers.
Under the new regulations, stablecoin issuers must fully back their tokens with reserve assets and maintain an additional buffer equal to at least 2% of their value. At least 40% of reserves must consist of cash or qualifying highly liquid assets.
The rules set minimum paid-up capital of 10 billion naira ($7.4 million) for naira-backed issuers and 15 billion naira ($11.1 million) for foreign currency-backed stablecoin issuers. Companies providing payment-related crypto services, including exchange and custody services, must maintain minimum paid-up capital of 1 billion naira ($742,000).
The regulations also prohibit stablecoins that rely primarily on algorithms rather than eligible reserves to maintain their value, along with tokens that lack enforceable redemption rights.
Nigeria has taken a restrictive approach to crypto trading, previously limiting banking access for exchanges and seeking to restrict peer-to-peer trading using local currency. The country drew international attention in the crypto industry over its dispute with Binance, the world's largest cryptocurrency exchange by trading volume. Binance discontinued its Nigerian naira services in March 2024 amid government scrutiny of crypto trading and allegations of currency manipulation. Nigerian authorities also detained Binance executive Tigran Gambaryan for nearly eight months before dropping money laundering charges against him in October 2024.
More recently, Nigeria's revenue agency introduced crypto tax collection rules for digital asset platforms and peer-to-peer marketplaces in August 2026.
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Minimum paid-up capital required under Nigeria's new crypto rules, by category
billion naira
Requirements set by the Central Bank of Nigeria under the Regulations for the Operations of Non-Security Virtual Assets. Source: Cointelegraph
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Analysis
Why This Matters
The new rules formalise a regulatory framework for stablecoins and crypto payment services in Africa's largest economy, potentially setting a precedent for other nations in the region.
The ban on algorithmic stablecoins and the requirement for fully backed reserves could reduce consumer risk from unbacked digital assets, but may also push some crypto activity underground.
The 180-day transition period gives existing operators time to adjust, though the high capital minimums (up to $11.1 million for foreign currency-backed stablecoins) may exclude smaller players.
Background
Nigeria has one of the highest rates of cryptocurrency adoption in Africa, driven partly by a desire to hedge against currency volatility and inflation. The CBN has long been sceptical of crypto, restricting bank access for exchanges in 2021 before partially reversing that stance in 2023. The country's dispute with Binance and the prolonged detention of an executive drew global attention to its enforcement posture. The new regulations come after President Tinubu's July 2026 executive order aimed at coordinating crypto oversight among agencies.
Key Perspectives
Central Bank of Nigeria (CBN): says the framework aims to support responsible innovation while protecting consumers and financial stability.
What to Watch
The number and type of applications the CBN receives in the 180-day window, and how many existing operators leave the market.
Whether the ban on algorithmic stablecoins and the reserve requirements lead to a shift toward fully backed stablecoins denominated in naira or foreign currency.
Any further regulatory moves from Nigeria's revenue agency or securities regulator in the wake of the CBN rules.
12 claims in this story checked against 1 source: 11 supported.
Show each claim
SupportedThe CBN has set new crypto licensing rules.Cointelegraph.com News: “Nigeria sets new crypto licensing rules, bans algorithmic stablecoins.”
Partly supportedThe rules ban algorithmic stablecoins.Cointelegraph.com News: “The regulations also prohibit stablecoins that rely primarily on algorithms rather than eligible reserves to maintain their value”
SupportedThe regulations require stablecoin issuers to maintain reserve buffers.Cointelegraph.com News: “stablecoin issuers must fully back their tokens with reserve assets and maintain an additional buffer equal to at least 2% of their value.”
SupportedThe regulations set capital minimums for covered operators.Cointelegraph.com News: “The rules also set minimum paid-up capital”
SupportedExisting operators have 180 days to apply for licenses or authorizations.Cointelegraph.com News: “The regulations took effect immediately, though existing operators have 180 days to apply for licenses or authorizations.”
SupportedThe CBN issued the Regulations for the Operations of Non-Security Virtual Assets on Thursday.Cointelegraph.com News: “The Central Bank of Nigeria (CBN) issued the Regulations for the Operations of Non-Security Virtual Assets on Thursday”
SupportedThe regulations took effect immediately.Cointelegraph.com News: “The regulations took effect immediately”
SupportedThe CBN said the framework aims to support responsible innovation while protecting consumers and financial stability.Cointelegraph.com News: “The CBN said the framework aims to support responsible innovation while protecting consumers and financial stability.”
SupportedThe regulations set stablecoin issuer paid-up capital minimums of 10 billion naira for naira-backed issuers and 15 billion naira for foreign currency-backed issuers.Cointelegraph.com News: “The rules also set minimum paid-up capital of 10 billion naira ($7.4 million) for naira-backed issuers and 15 billion naira ($11.1 million) for foreign currency-backed stablecoin issuers.”
SupportedStablecoin issuers must fully back their tokens with reserves and maintain an additional buffer of at least 2% of their value.Cointelegraph.com News: “stablecoin issuers must fully back their tokens with reserve assets and maintain an additional buffer equal to at least 2% of their value.”
SupportedAt least 40% of reserves must consist of cash or qualifying highly liquid assets.Cointelegraph.com News: “At least 40% of reserves must consist of cash or qualifying highly liquid assets.”
SupportedPayment-related crypto service companies, including exchange and custody services, must maintain minimum paid-up capital of 1 billion naira ($742,000).Cointelegraph.com News: “Additionally, companies providing payment-related crypto services, including exchange and custody services, must maintain minimum paid-up capital of 1 billion naira ($742,000).”
