Nigeria’s central bank brought new stablecoin regulations into effect on November 5, 2026, requiring locally incorporated issuers and separate approval for each token admitted to its market. The rules prohibit algorithmic stablecoins and fiat-referenced tokens backed wholly or primarily by other crypto assets.
The Regulations for the Operations of Non-Security Virtual Assets in Nigeria apply to overseas operators serving Nigerian users. They also give holders enforceable redemption rights, restrict issuer-paid yield and set a transition process for businesses already operating. Existing operators can continue only at their existing scale, subject to the central bank’s interim conditions.
Foreign issuers need a Nigerian entity
The Central Bank of Nigeria separates naira-referenced stablecoins from those referencing foreign currencies. Naira issuers fall into Class 1; foreign-currency issuers fall into Class 2. A foreign-currency token can be offered, distributed, exchanged, held in custody or redeemed for Nigerian users only through a Nigerian-incorporated entity holding the relevant issuer licence.
An overseas licence or an arrangement with a Nigerian intermediary cannot replace that requirement. The rules expressly cover foreign issuers whose tokens are made available to Nigerians, even if the operator has no physical presence in the country. Distributors must also check that a token has approval before making it available.
Token approval is separate from the issuer’s licence. It covers the reference currency, reserve arrangements, name, ticker and supported blockchain networks. Businesses with activities that fall under both the central bank and the Securities and Exchange Commission must obtain the permissions each regulator requires for the activity concerned.
A naira-referenced issuer must have at least ten billion naira in capital. A foreign-currency issuer must have fifteen billion naira. Each minimum applies on entry and throughout operations, and the central bank can require a higher amount. Foreign-currency issuers must also appoint a Nigerian deposit money bank as their local redemption agent.
Those issuers must maintain operational liquidity capable of meeting expected Nigerian redemption demand and demand under stress. They must keep that liquidity separate from both the reserve pool and regulatory capital. It cannot substitute for the assets backing the tokens. The issuer’s arrangements must keep it available to meet Nigerian redemption and payment obligations.
Restrictions reach collateral and yield
The ban covers tokens that adjust supply algorithmically to maintain a peg, as well as fiat-referenced tokens backed wholly or primarily by other virtual assets. Admission depends on a token’s collateral structure alongside its reference currency and the arrangements its issuer has in place.
The regulations also prohibit an issuer from paying, offering, arranging or facilitating interest, yield, dividends or other financial benefits simply because a customer holds or deposits its stablecoin. An issuer cannot use a service provider to get around the restriction.
Lending and borrowing regulated tokens require separate approval under applicable law. An issuer licence or token approval alone gives no permission for either activity. The rule also prohibits lending, investment or other activities that misuse customer assets or the issuer’s reserve pool. These restrictions apply when a licensed stablecoin business extends into yield products.
Redemption has a deadline and a cost rule
Holders of stablecoins issued under the framework have an enforceable right to redeem at par, subject to the exceptions in the regulations. Issuers must ordinarily settle a valid request in the reference currency by the end of the following business day. During a stress event, an issuer can apply to the central bank for a longer period. Any extension is capped at five business days or a shorter statutory maximum.
Standard redemption must be free. A fee for non-standard settlement needs central-bank approval and must be proportionate to actual cost. The issuer must disclose it in both the whitepaper and customer agreement. The regulator can also prescribe the maximum permitted minimum redemption amount.
An issuer that suspends redemptions must notify the central bank immediately, and no later than one hour after suspension. A suspension lasting beyond forty-eight hours requires written approval. The issuer must publish the reasons and expected restoration timeline. When redemption resumes, it must process pending requests in their original order.
An issuer can mint tokens only after receiving equivalent eligible reserve assets. Expected future receipts do not qualify. Redeemed tokens must continue to count toward the backing requirement until they have been permanently removed from circulation, burned or otherwise extinguished. The reserve obligation remains in place while those tokens can still circulate.
Reserves must remain available to holders
Issuers must maintain full backing continuously, including between reporting dates. The framework also requires a reserve buffer of at least two per cent of circulating stablecoins’ par value to absorb valuation losses and accrued operational liabilities. An issuer needs prior central-bank approval to release that buffer.
Reserve assets can be used only to support redemption and for permitted liquidity management. Lending, pledging, staking or otherwise encumbering those assets is generally prohibited. A narrow exception permits approved secured liquidity transactions against eligible high-quality liquid assets. Those transactions must avoid material leverage, preserve segregation and priority, and meet the regulator’s unwind and redemption requirements.
Issuers must hold reserves on trust for holders, obtain an independent legal opinion on bankruptcy remoteness and secure written acknowledgement from each reserve custodian. The regulations expressly stop short of creating a statutory trust or changing statutory insolvency priorities. Issuers still need legal arrangements that work under applicable insolvency law.
Existing operators face a staged transition
Existing businesses must register within thirty days of commencement and begin supervisory reporting within sixty days, or sooner if directed. Anti-money-laundering, counter-terrorist-financing and counter-proliferation-financing obligations apply from commencement. Businesses must submit a complete licence or authorisation application within one hundred and eighty calendar days.
An operator that fails to submit that application must cease operations until it obtains the necessary permission. Existing foreign-currency stablecoin arrangements remain subject to assessment against Nigerian incorporation, issuer licensing and service-provider approval requirements. Continued access during that assessment requires express interim permission from the central bank. That permission provides no permanent exemption.
