CBN Introduces New Regulations for Crypto Market, Sets Capital Requirements for Stablecoin Issuers

The Central Bank of Nigeria (CBN) has introduced new regulatory requirements for non-security virtual assets, including stablecoins and digital payment tokens. The regulations, which took effect on November 5, 2026, aim to bring stablecoins and other non-security virtual asset activities within a risk-based supervisory framework. This move is intended to address concerns around financial stability, monetary policy, foreign exchange management, money laundering, and consumer protection.

The new framework establishes licensing, capital adequacy, reserve management, consumer protection, and reporting requirements for businesses involved in issuing, distributing, converting, transferring, safeguarding, and settling regulated virtual assets. The CBN requires foreign currency-referenced stablecoin issuers to maintain a minimum paid-up capital of N15 billion, while naira-referenced stablecoin issuers must maintain N10 billion. Providers of other non-security virtual asset services must have a minimum paid-up capital of N1 billion.

The regulations classify stablecoins into two categories: Class 1, covering naira-referenced stablecoins, and Class 2, covering stablecoins linked to foreign currencies such as the United States dollar. The requirements apply to both local and foreign-backed operators seeking to serve the Nigerian market. Foreign issuers cannot claim exemption from Nigerian incorporation, licensing, or capital requirements, and must operate through a Nigerian-incorporated entity holding the appropriate CBN license.

Licensed issuers are required to maintain adequate reserves to support the value and redemption of their tokens. Stablecoin issuers must maintain at least 40% of their total reserve pool in cash or eligible high-quality liquid assets. For naira-backed stablecoins, an additional requirement is that at least 20% of the total reserve pool must be maintained as a dedicated cash deposit with the CBN.

The regulations prohibit issuers from creating new stablecoin tokens without first receiving equivalent eligible reserve assets. This is intended to prevent the issuance of tokens without corresponding financial backing. Reserve assets must be separated from the issuer's operational and corporate funds and held for the benefit of stablecoin holders. Issuers are generally prohibited from lending, pledging, or using the reserves as collateral for borrowing.

The CBN has also introduced specific liquidity and redemption obligations, requiring issuers to demonstrate their capacity to meet customers' requests for conversion and repayment, including during periods of financial stress. The apex bank stated that the framework was necessary to support innovation in digital payments, remittances, and financial settlement without exposing Nigeria's financial system to unmanaged risks.

The new regulations are expected to provide a more secure and stable environment for the growing crypto market in Nigeria. The CBN's move is aimed at balancing innovation with regulatory oversight, ensuring that the country's financial system remains stable and secure. The regulations will apply to all operators in the non-security virtual asset space, including those offering services related to stablecoins and digital payment tokens.

Key points

• The CBN requires a minimum paid-up capital of N15 billion for foreign currency-referenced stablecoin issuers.
• The regulations classify stablecoins into two categories: Class 1 (naira-referenced) and Class 2 (foreign currency-referenced).
• Licensed issuers must maintain at least 40% of their total reserve pool in cash or eligible high-quality liquid assets.