Nigeria’s central bank has rolled out a strict new regulatory regime for stablecoins that raises capital hurdles, bans algorithmic designs and tightens reserve, licensing and compliance rules — measures that could reshape how digital cash products are offered to Nigerians. Key points - Effective November 5, 2026, the Central Bank of Nigeria (CBN) requires foreign-currency stablecoin issuers to hold at least ₦15 billion in paid‑up capital; naira-backed stablecoin issuers must hold at least ₦10 billion. - Algorithmic stablecoins — and other designs that lack adequate reserve backing or enforceable redemption rights — are prohibited. - Each stablecoin requires separate written approval from the CBN; issuers must disclose the reference currency, reserve arrangements, name, ticker and supported blockchains. - Foreign-currency issuers must incorporate in Nigeria and obtain a Foreign Currency Issuer Licence; foreign licenses alone aren’t enough. - Reserve rules mandate one-to-one backing of outstanding tokens, daily reserve checks, prohibition on minting tokens before corresponding reserves are in place, and an additional reserve buffer of at least 2%. - AML/KYC, sanctions screening, transaction monitoring and Travel Rule obligations are required. Tokens tied to sanctioned entities or jurisdictions are banned. - Other virtual-asset businesses face a minimum capital requirement of ₦1 billion; securities regulation remains under the SEC and its capital requirements apply in addition to CBN rules. - Existing regulated virtual-asset service providers have 180 days from the rules’ start to apply for appropriate licenses; they must register with the CBN within 30 days and begin supervisory reporting within 60 days. - Noncompliance can trigger heavy penalties, including a minimum ₦100 million fine plus at least ₦1 million per day the violation continues. Licensing framework and who it affects The CBN creates two classes: Class 1 covers naira-backed stablecoins; Class 2 covers foreign-currency (e.g., dollar) stablecoins. Class 2 issuers face the higher ₦15 billion capital floor. The rules apply to companies operating in Nigeria, overseas businesses targeting Nigerian customers and services that could affect Nigeria’s payments or foreign-exchange markets. Each issuer must obtain local authorization before offering tokens to Nigerians. Reserve, operational and design safeguards The CBN demands strict reserve transparency and prudence: full one-to-one backing, a minimum 2% additional buffer, daily reconciliation of reserves against outstanding tokens, and limits on how backing assets are held and used. It explicitly bans algorithmic models that rely on supply adjustments rather than adequate reserve backing, as well as fiat‑pegged tokens mainly backed by other cryptocurrencies or tokens that don’t guarantee redemption at face value. Compliance and market conduct Issuers must implement customer ID verification, sanctions screening and transaction monitoring consistent with Nigeria’s AML/CFT framework. The Travel Rule applies to qualifying virtual asset transfers. Tokens from sanctioned entities or jurisdictions are not allowed. Transition, enforcement and penalties Existing providers must register within 30 days, start supervisory reporting within 60 days, and submit license applications within 180 days — otherwise they must stop regulated activities. The CBN can impose penalties for unlicensed activity, including minimum fines and daily penalties for continued violations. Context and implications The move follows growing stablecoin use in Nigeria for payments, savings and cross‑border transfers and echoes warnings from the IMF that unchecked adoption could complicate monetary policy and forex management. The CBN’s framework seems designed to bring issuers onshore, tighten consumer protections and limit systemic risks — but it will raise the bar for international stablecoin projects seeking Nigerian users. Market notes Tether has announced plans to work with Shiga on wallet services for Africa and the Gulf; Shiga’s Nigerian license is still pending final approval. Nigeria also previously greenlit a naira stablecoin pilot (cNGN) in a regulatory sandbox in January 2024. The CBN did not respond to requests for comment by press time. Read more AI-generated news on: https://app.chaingpt.org/news