The Central Bank of Nigeria (CBN) has published a full rulebook for stablecoins, and it closes the door on two kinds of token outright. Algorithmic stablecoins and fiat-pegged tokens backed mainly by other crypto-assets are now prohibited in Nigeria. Every other stablecoin needs a CBN licence for its issuer and a separate written approval for the token itself, with paid-up capital of 10 billion naira for a naira coin and 15 billion naira for a dollar coin. The Regulations for the Operations of Non-Security Virtual Assets in Nigeria, a 169-page PDF on the CBN website, took effect on Thursday 5 November, according to The Block and Journal du Coin.
The detail that matters most for the country’s crypto users sits in Section 11. No foreign-currency stablecoin, dollar tokens such as USDT and USDC included, may be offered, exchanged, held in custody or redeemed for people in Nigeria unless the CBN approves it and it is issued through a company incorporated in Nigeria that holds the new Class 2 licence. Existing operators have 180 days from commencement to apply.
That makes this the most detailed piece of Nigeria stablecoin regulation so far, in a market where dollar tokens are widely used for savings and payments, as our guide to stablecoins as dollar access in Nigeria, Ghana, Kenya and Egypt explains. The text does not name Tether, Circle or any other issuer, and no company had reacted publicly in the coverage we found by midday on 7 November.
What the Nigeria stablecoin regulation covers
The rulebook is broad. It applies to anyone who issues or distributes stablecoins, runs an exchange or conversion service, operates on-ramps and off-ramps, holds tokens or wallets in custody, moves value through transfer, payment or remittance services, or runs payment and settlement infrastructure built on these tokens. It also covers the custody of stablecoin reserves.
Its reach is not limited to firms with an office in Lagos or Abuja. The regulations apply to activity carried out in or from Nigeria and directed at persons in Nigeria, which The Block summarised as covering operators “even if the operator has no physical presence in the country”. A foreign exchange or wallet that markets dollar tokens to Nigerians is therefore in scope.
The CBN sorts regulated tokens into four groups. Class 1 stablecoins reference the naira one to one and must be fully backed by naira reserve assets. Class 2 stablecoins reference a foreign currency, in practice the US dollar for most of the market. Deposit Money Tokens are tokenised bank deposits issued by banks under their own licence. The central bank can designate other tokens, and it says it will classify by economic substance rather than by the name a project gives itself.
Six types of permission exist: the Class 1 issuer licence, the Class 2 foreign currency issuer licence, an Other Services Licence for exchanges, custodians and payment firms that hold no SEC licence, an Other Services Authorisation for those that already hold one, an approval for banks and other licensed institutions to extend what they already do, and a licence for Deposit Money Tokens. On top of the issuer licence, each token needs its own written Token Approval, covering its reference currency and its reserve arrangements, before a single unit is minted.
Algorithmic and crypto-backed stablecoins are banned outright
Section 2.2 lists the prohibited tokens. They may not be issued, offered, distributed or traded in Nigeria:
- algorithmic stablecoins, defined as tokens that try to hold their value through algorithmic adjustment of supply or demand instead of full backing by eligible reserve assets;
- tokens that reference a fiat currency but are backed wholly or mainly by other virtual assets;
- tokens issued by or for a sanctioned person, or someone in a sanctioned jurisdiction;
- tokens marketed as stablecoins that give holders no enforceable right to redeem at par;
- any other token the CBN decides is an unacceptable risk to monetary or financial stability, financial integrity or consumers.
The ban reaches beyond issuers. Anyone who issues, offers, distributes or “facilitates access to” a prohibited token in Nigeria faces the enforcement measures of Part 11, so an exchange that lists one is exposed too. Section 13.1 repeats the point: algorithmic stablecoins without full reserve backing “shall remain prohibited”.
The second item on the list is the one with the widest effect. Crypto-collateralised dollar tokens, the model used by several decentralised finance protocols, fall into it if their backing is wholly or mainly other crypto-assets. The CBN does not name any token, so whether a given coin fits the definition will be decided case by case.
Dollar stablecoins need a Nigerian issuer with a Class 2 licence
Section 11.1 is short and strict. A Class 2 stablecoin may only be issued by a company incorporated in Nigeria that holds the Foreign Currency Issuer Licence. No stablecoin referencing a foreign currency may be offered, distributed, marketed, exchanged, held in custody, redeemed “or otherwise made available” to people in Nigeria unless the CBN has approved it as Class 2 and it is issued through such a licensed issuer.
A foreign group can own or work with the Nigerian entity, under Section 11.2. The local company stays fully responsible for compliance, the CBN gets unrestricted access to its books, systems, reserves and relevant group information, and foreign licences supplement Nigerian rules rather than replace them. Class 2 issuers must also keep operational liquidity reachable for Nigerian redemptions, measured against three yardsticks listed in Section 11.3.1: $10 million, 15% of Nigeria-linked liabilities and 30 days of stressed outflows. The CBN can demand more if its stress tests show the first two are not enough.
For Tether and Circle, the two largest dollar stablecoin issuers, the text implies a choice: set up or partner with a licensed Nigerian issuer, or see their tokens become unlawful to offer to Nigerians once the transition ends. The regulations name neither company, and neither had said anything about the rules in the coverage we found. Saying USDT or USDC is banned in Nigeria would go beyond the text.
180 days to apply, 30 days to register
Section 54.1 sets the transition. Existing operators must apply for the right licence or authorisation within 180 calendar days of commencement. In the meantime they may carry on only at their existing scale and under the CBN’s interim conditions, and only if they register with the central bank within 30 days, apply anti-money-laundering rules from day one, start supervisory reporting within 60 days and file a complete application in time. Those that miss the deadline must stop until they are licensed.
Existing Class 2 arrangements will be assessed against the incorporation and licensing rules, and any continued access during that review needs the CBN’s “express interim permission”. Peer-to-peer platforms, long a channel for naira-to-dollar trades, must apply for their own approval under Section 10 within the same 180 days.
The CBN text says the clock runs from the commencement date set in an issuing instrument, which we could not find on the CBN website on 7 November. If commencement was 5 November, as The Block and Journal du Coin report, the deadlines fall on 5 December 2026 for registration, 4 January 2027 for reporting and 4 May 2027 for applications. Those dates are our arithmetic, not the CBN’s.
Capital of 10 and 15 billion naira, reserves of 1:1 plus 2%
The financial requirements are the part most likely to thin the field. Under Sections 15 and 16, a Class 1 naira issuer must hold paid-up capital of 10 billion naira, a Class 2 foreign-currency issuer 15 billion naira, and other service providers 1 billion naira, in each case “or such higher amount as the Bank may prescribe”. Cointelegraph put those sums at about $7.4 million, $11.1 million and $742,000. For a provider that already holds a licence from the Securities and Exchange Commission (SEC), the CBN capital comes on top of what the SEC requires.
The capital has to be real money. Section 17 asks for cash in a capital account at the CBN or Nigerian government securities placed under a CBN lien; virtual assets and guarantees do not count. Section 15.3 adds that there is “no offshore issuer exemption from incorporation, licensing or capital”. An application for either issuer licence costs 10 million naira, non-refundable, and each issuer licence costs 5 million naira a year to renew.
Reserves follow the model regulators elsewhere have settled on, with a few Nigerian additions. The reserve blockchain that runs exactly as written when it is called, holding and moving funds according to its code, without an intermediary able to change the outcome.">smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool must equal at least 100% of the stablecoins in circulation at all times, plus a buffer of at least 2% of par value. At least 40% of the pool must sit in cash or high-quality liquid assets maturing within six months. For naira coins, at least 20% of the pool also has to be held as cash in a Reserve Deposit Account at the CBN itself, which pays no interest, and that deposit does not count towards the 40%. An issuer whose balance there falls short must tell the CBN the same day and stop issuing if the gap lasts more than five consecutive business days. No single Nigerian bank may hold more than 30% of a pool.
For Class 1 tokens, eligible reserves include CBN deposits, Treasury bills of up to 90 days, federal government bonds with up to 180 days left, segregated naira deposits at licensed banks, overnight reverse repos, CBN Open Market Operation bills of up to 90 days and naira money market funds supervised by the SEC, the latter capped at 10%. Class 2 reserves are held in the reference currency: cash at Nigerian banks or foreign banks the CBN approves, that currency’s sovereign securities of up to 93 days and overnight reverse repos. The text sets no share of Class 2 reserves that must stay in Nigeria.
Reserves must be segregated and held for holders as a class, with first claim on them if the issuer fails, backed by a legal opinion. They may not be lent, staked, pledged or used to pay operating costs. Tokens may only be minted once the matching reserve assets have arrived, and the issuer reconciles reserves against supply every day.
| Requirement | Rule | Section |
|---|---|---|
| Class 1 (naira) issuer capital | 10 billion naira (about $7.4M) | 15.1 |
| Class 2 (foreign currency) issuer capital | 15 billion naira (about $11.1M) | 15.2 |
| Other service providers | 1 billion naira (about $742,000) | 16.1 |
| Reserve pool | At least 1:1 with supply, plus a buffer of at least 2% of par | 24.2, 24.4 |
| Liquid share of reserves | At least 40% in cash or HQLA of six months or less (for Class 1, on top of the CBN deposit) | 24.12 |
| Cash at the CBN (Class 1 only) | At least 20% of the reserve pool | 24.25 |
| Redemption | At par, by the end of the next business day; up to five business days in a stress event | 23.3 |
| Systemic designation | Supply above 500 billion naira for 30 days, or more than 5 million users in Nigeria | 3.6 |
Dollar conversions are Cointelegraph’s, made on 6 November.
Redemption at par by the next business day, and no yield
Section 23.2 gives every holder an “absolute, legally enforceable right” to redeem at par at any time, subject only to exceptions the text lists. The issuer must pay out in the reference currency by the end of the business day after a valid request. In a stress event the CBN may allow up to five business days. A standard redemption is free. That is a tighter clock than the three business days in Canada’s draft stablecoin rules, which also allow a fee.
Stablecoins may not earn their holders anything. Section 13.3 forbids an issuer to pay, offer, arrange or facilitate interest, yield, dividends or other returns for holding its token, and bars the use of a service provider to get around the rule. The fine for breaking it is twice the prohibited payment.
A token becomes “systemic” if its supply is worth more than 500 billion naira on each day for 30 consecutive days, or if more than 5 million people in Nigeria hold or use it. The CBN can also designate one on other grounds, such as transaction volume or the share of a token’s activity linked to Nigeria. Systemic coins get closer supervision.
Fines start at 100 million naira for unlicensed activity
Section 51.1 sets minimum penalties. Operating without the required licence costs at least 100 million naira plus at least 1 million naira for each day the breach continues. Material breaches of reserve, capital or liquidity rules carry 50 million to 250 million naira per breach, and lending or pledging reserves 250 million to 500 million naira.
Anti-money-laundering failures, Travel Rule breaches included, cost at least 50 million naira per breach plus restitution. Deliberate misrepresentation about reserves brings a fine of at least 500 million naira and a referral for criminal prosecution. The Block notes that the rules require customer due diligence, sanctions screening and the Travel Rule across custodial wallets, peer-to-peer services and remittance channels.
Why the central bank, and not SEC Nigeria, wrote these rules
Nigeria has two crypto regulators, and these rules draw a line between them. The Investments and Securities Act 2025, signed in late March 2025, brought digital assets that count as securities under the SEC. In an executive order on virtual assets announced on 17 July 2026, President Bola Tinubu, according to Nairametrics, set up a Virtual Asset Council chaired by the CBN, with the Nigeria Revenue Service and the SEC as vice-chairs, and gave the central bank oversight of payment, settlement and custody services for non-security assets.
The new regulations cite that order, the CBN Act 2007, the Banks and Other Financial Institutions Act 2020, the Foreign Exchange Act and the 2022 anti-money-laundering and terrorism laws. They do not extend to tokens that are securities. A token that only gives the right to redeem at par and pays nothing is treated as a non-security; a firm active in both fields needs both approvals, and the Council settles disputes over classification.
The relationship between the authorities and crypto firms has been rough. Cointelegraph recalls that Binance stopped its naira services in March 2024, that its executive Tigran Gambaryan was held in Nigeria for nearly eight months before charges against him were dropped in October 2024, and that the revenue agency issued crypto tax-collection rules in August 2026. Cointelegraph reports the CBN’s stated aim as supporting “responsible innovation” while protecting consumers and financial stability.
The naira stablecoin cNGN references the naira, so on our reading of the definitions it would fall in Class 1; none of the outlets we read said how the CBN will treat it.
How Nigeria’s rules compare with MiCA
European readers will recognise much of the framework. The EU’s Markets in Crypto-Assets Regulation (EU) 2023/1114 has applied its stablecoin titles, for e-money tokens (EMTs) and asset-referenced tokens (ARTs), since 30 June 2024. Under Article 48, an EMT issuer must be authorised as a credit institution or an electronic money institution. Article 49 requires it to redeem at any time and at par value, without a fee, and Articles 40 and 50 forbid ART and EMT issuers, and the crypto service providers handling those tokens, from granting interest. Our guide to the MiCA regulation covers the rest.
Licensing, par redemption and a ban on interest are therefore common ground. The differences are in the numbers. Article 49 sets no deadline for paying out, where Nigeria writes the next business day into its text. Article 54 asks an EMT issuer to keep at least 30% of the funds it receives in separate accounts at credit institutions and to invest the rest in highly liquid, low-risk assets in the same currency; Nigeria asks for 40% in cash or liquid assets plus, for naira coins, 20% at the central bank. Article 35 sets own funds for ART issuers at the highest of 350,000 euros, 2% of the average reserve or a quarter of the previous year’s fixed overheads, far below Nigeria’s fixed 10 and 15 billion naira.
Both systems want a local entity. MiCA reserves EMTs to EU-authorised banks and e-money institutions and requires ART issuers to be established in the Union, but under Article 16(3) an ART authorisation is valid across the whole EU. A Nigerian Class 2 licence covers one country.
On algorithmic tokens the two diverge. MiCA does not prohibit them by name. Recital 41 of its preamble says the EMT and ART rules apply whatever mechanism an issuer uses to keep a stable value, including so-called algorithmic stablecoins that aim to hold a value against a currency or other assets; algorithmic tokens that reference no asset fall under the general rules of Title II. Nigeria’s Section 2.2 simply bans algorithmic and crypto-backed stablecoins.
The EU has also shown what happens to non-compliant dollar tokens: platforms delist or convert them. USDC already had 56% of euro stablecoin trading before Coinbase converted EEA users’ USDT, as we reported in our piece on USDC overtaking USDT in Europe. Nigeria’s Section 11.1 could push the market in the same direction if no Class 2 issuer appears for USDT.
What is still unknown
Several things are missing. The CBN’s issuing circular, which should state the commencement date, did not appear on its website when we checked. No exchange operating in Nigeria, no stablecoin issuer and no trade body had commented in the reports we read.
The biggest open question is whether Tether or Circle will seek Class 2 status through a Nigerian company, or whether local firms will issue licensed dollar tokens of their own. Yield-bearing tokens are pushed towards the SEC: the CBN’s own table of who regulates what (Schedule 8) says a return to holders makes the product an investment, with the SEC as lead, and how the SEC will treat them is not yet known. The first fixed date is 5 December 2026, when existing operators that want to keep running would have to be registered, if commencement was 5 November as reported.