Nigeria's central bank requires stablecoin issuers to obtain licenses and distinguishes between naira-pegged and foreign-currency token categories
The Central Bank of Nigeria (CBN) requires stablecoin issuers to obtain licenses under the Non-Security Virtual Asset Operations Regulation, which took effect on November 5, and divides stablecoins into two categories: Class 1, naira-pegged tokens, and Class 2, foreign-currency-pegged tokens. Issuers must obtain separate CBN approval before issuing each type of token.
Under the regulation, the minimum paid-up capital for Class 2 (foreign-currency-pegged) issuers is 15 billion naira, and for Class 1 (naira-pegged) issuers is 10 billion naira. Foreign-currency-pegged stablecoins must be issued through an entity registered in Nigeria and holding a Class 2 license; foreign licenses cannot substitute. The regulation also bans algorithmic stablecoins and requires tokens to be fully reserve-backed, plus 2% overcollateralization.
Existing operators must register with the CBN within 30 days after the regulation takes effect, begin submitting regulatory reports within 60 days, and complete their license applications within 180 days. The rules cover activities conducted in Nigeria or affecting Nigeria's financial system, even if the operator has no physical presence.
Original source:
Title: Nigeria's central bank introduces stablecoin licensing rules, bans algorithmic versions Publisher: The Block Publication date: 2026-11-06 URL: https://www.theblock.co/news/regulation/2026-11-06-nigerias-central-bank-introduces-stablecoin-licensing-rules-bans-algorithmic-versions-435867 Nature of source: media report Verification: The Block and several Nigerian media outlets were read for this article, verification date 2026-11-06 Supporting content: supports all license categories, capital requirements and approval mechanism in the body
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The Central Bank of Nigeria's new regulation, which took effect on November 5, requires stablecoin issuers to obtain licenses and divides stablecoins into two categories: Class 1 (naira-pegged) and Class 2 (foreign-currency-pegged). Issuers must obtain separate CBN approval before issuing each type of token.
In terms of capital and market entry, the minimum paid-up capital for Class 2 issuers is 15 billion naira, and for Class 1 issuers is 10 billion naira. Foreign-currency-pegged stablecoins must be issued through an entity registered in Nigeria and holding a Class 2 license; foreign licenses cannot substitute. The regulation bans algorithmic stablecoins and requires full reserve backing plus 2% overcollateralization. Existing operators have 180 days to apply for licenses.
Compared with Nigeria's previous restrictive stance toward cryptocurrency, this regulation establishes a formal licensing framework. The similarity is that the CBN remains the lead authority; the key difference is the explicit separation of naira- and foreign-currency-pegged tokens, along with local registration and capital thresholds. The rules cover activities affecting Nigeria's financial system even if the operator has no physical presence.
For issuers, foreign-currency stablecoin issuance requires local registration, capital and reserve requirements. For users, redeemability rights are clearly defined, while algorithmic stablecoins are prohibited. For regulators, the CBN is bringing stablecoins under supervision of the payments and foreign exchange system, while giving existing operators a transition period.
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The CBN divides stablecoins into Class 1 (naira-pegged) and Class 2 (foreign-currency-pegged), and separate approval is required before issuance.
The minimum paid-up capital for Class 2 is 15 billion naira, and for Class 1 is 10 billion naira; issuance must be through a locally registered entity.
The regulation bans algorithmic stablecoins and requires full reserve backing plus 2% overcollateralization.