The Central Bank of Nigeria (CBN) has issued a comprehensive regulatory framework for non-security virtual assets, bringing stablecoins, Deposit Money Tokens (DMTs), virtual asset service providers (VASPs), and platform-facilitated peer-to-peer services under formal licensing and supervision. The regulations took effect on November 5, 2026.
What the rules cover
The framework applies to issuers, exchanges, wallet providers, custodians, payment and remittance firms, and even foreign operators whose products are offered to Nigerians—regardless of whether they maintain a physical presence in the country. It covers issuance, conversion, custody, transfers, payments, clearing, settlement, and reserve management.
The CBN said the rules aim to promote responsible innovation while protecting consumers, preserving monetary policy control, and safeguarding financial stability.
High capital barriers
The regulations impose steep entry requirements:
Naira-referenced stablecoin issuers (Class 1): N10 billion minimum paid-up capital.
Foreign-currency stablecoin issuers (Class 2): N15 billion minimum paid-up capital.
Other virtual asset service providers, including payment and P2P operators: N1 billion minimum paid-up capital.
For Class 2 issuers, the CBN also requires operational liquidity of at least $10 million or equivalent, 15 percent of Nigeria-linked outstanding liabilities, and enough funds to cover 30 days of stressed Nigerian redemptions.
Strict reserve and consumer safeguards
Stablecoin issuers must back every token with eligible reserve assets before minting, maintain segregated reserves, and guarantee redemption at par within one business day. Reserves cannot be used for lending, staking, operating expenses, or collateral.
The rules prohibit algorithmic stablecoins without full reserve backing, ban yield or interest payments to token holders, and bar issuers from presenting stablecoins as bank deposits or as covered by NDIC insurance.
P2P services now regulated
Platform-facilitated peer-to-peer services—where an operator provides matching, escrow, payment facilitation, or settlement support—must obtain CBN approval. Purely private bilateral transfers between two parties remain outside the scope.
AML and cross-border controls
All licensed entities must implement customer due diligence, sanctions screening, transaction monitoring, blockchain analytics, and Travel Rule compliance. Cross-border virtual asset transactions are treated as foreign-exchange transactions and must meet the same documentation and reporting standards as conventional FX deals.
The CBN retains power to freeze, block, or burn tokens on lawful order, and can suspend specific corridors, cap volumes, or halt Naira-to-stablecoin conversions during periods of FX market stress.
Penalties for non-compliance
Operating without a licence attracts a minimum fine of N100 million, plus N1 million for each day the breach continues. Reserve mismanagement or fraudulent misrepresentation can draw fines of up to N500 million and criminal referral.
Existing operators have 180 days to apply for the appropriate licence or authorisation, and must register with the CBN within 30 days of commencement.
Coordination with SEC
The regulations do not displace the Securities and Exchange Commission’s mandate over security virtual assets, tokenised securities, or investment products. A Virtual Asset Council, established under a 2026 presidential executive order, will coordinate classification and jurisdictional questions between the two regulators.
