Nigeria's central bank licenses stablecoin issuers, bans algorithmic tokens

Summary

The Central Bank of Nigeria put into force on Nov. 5 its Regulations for the Operations of Non-Security Virtual Assets, creating separate licenses for naira-referenced and foreign-currency-referenced stablecoin issuers and for other non-security virtual-asset payment providers, The Block and Cointelegraph reported, citing the CBN circular and rulebook.

The Block said foreign-currency stablecoins may only be offered to Nigerians as Class 2 tokens issued through a Nigerian-incorporated entity with a Foreign Currency Issuer Licence, and that issuers must get written approval for each token's classification, reference currency, reserves, name, ticker and supported chains—even if the operator has no physical presence in Nigeria.

Cointelegraph said issuers must fully back tokens with reserves plus at least a 2% buffer, keep at least 40% of reserves in cash or qualifying highly liquid assets, and meet paid-up capital of 10 billion naira (about $7.4 million) for naira-backed issuers and 15 billion naira (about $11.1 million) for foreign-currency issuers, with payment-related service providers needing 1 billion naira.

Both outlets said algorithmic stablecoins—tokens that rely primarily on market or supply adjustments rather than eligible reserve assets—are banned, and The Block noted existing operators have 180 days to apply for the appropriate licence while the SEC keeps capital-market oversight.

Key facts

• The Block: the regulations took effect Nov. 5, 2026, and cover activities in Nigeria or affecting its payments system, financial sector or FX market even without a local physical presence. (The Block)
• Cointelegraph: minimum paid-up capital is 10 billion naira for naira-backed stablecoin issuers and 15 billion naira for foreign currency-backed issuers; payment-related crypto services need 1 billion naira. (Cointelegraph)
• Cointelegraph: issuers must fully back tokens with reserve assets plus an additional buffer of at least 2% of their value, with at least 40% of reserves in cash or qualifying highly liquid assets. (Cointelegraph)
• The Block: the CBN banned algorithmic stablecoins that rely primarily on market dynamics, rather than eligible reserve assets, to maintain their value; existing operators have 180 days to apply for a licence or authorization. (The Block)