By Chibuzor Alli
The Central Bank of Nigeria (CBN) has introduced a minimum capital requirement of N15bn for companies issuing dollar-backed stablecoins, raising the financial entry barrier for operators seeking to offer foreign currency-linked digital tokens in the country.
The new requirement forms part of sweeping regulations governing non-security virtual assets and digital payment services, signalling a tougher regulatory approach to Nigeria’s growing cryptocurrency and stablecoin market.
Under the framework, issuers of stablecoins pegged to foreign currencies, including the US dollar, must maintain at least N15bn in paid-up capital at entry and throughout their operations.
Section 15.2 of the regulations, titled Regulations for the Operations of Non-Security Virtual Assets in Nigeria, states: “A Class 2 Licensed Issuer shall maintain minimum paid-up capital of fifteen billion Naira (N15,000,000,000), or such higher amount as the Bank may prescribe, on entry and at all times thereafter.”
The regulations were released by the apex bank on Friday, following a circular dated November 5, 2026, signed by Musa Jimoh, Director of the Payments System Policy Department.
However, the capital threshold varies depending on the type of stablecoin an operator intends to issue.
Companies issuing naira-backed stablecoins, classified as Class 1, are required to maintain a minimum paid-up capital of N10bn.
The CBN stated: “A Class 1 Licensed Issuer shall maintain paid-up capital of ten billion Naira (N10,000,000,000), or such higher amount as the Bank may prescribe, on entry and at all times thereafter.”
Other non-security virtual asset service providers face a minimum capital requirement of N1bn. This category covers operators providing other regulated virtual asset services, with the required capital separate from funds committed to licences issued by the Securities and Exchange Commission (SEC) or other regulators.
The regulator has also reserved the power to demand additional capital from operators based on their transaction volumes, market importance, redemption obligations, technology risks and potential exposure to the wider financial system.
Importantly, the CBN has made clear that regulatory capital cannot be mixed with funds held for other purposes.
According to the regulations, “Capital shall be separate from and additional to issuer reserves, the CBN reserve deposit, customer funds and assets and operational liquidity.”
This means stablecoin issuers cannot count the funds backing their tokens, customer assets or operational liquidity towards meeting their minimum capital obligations.
The framework further requires eligible capital to be maintained as cash in designated accounts with the CBN or in approved Federal Government securities under the regulator’s control.
Operators that fall below the prescribed capital threshold must immediately notify the CBN and submit a capital restoration plan within 10 business days.
Until the shortfall is addressed, the regulator may restrict their ability to issue new tokens or onboard additional customers.
100% reserves, additional 2% buffer
Beyond the financial entry requirements, the CBN has introduced strict conditions on how stablecoins must be backed, requiring issuers to maintain eligible reserve assets equivalent to at least 100 per cent of their outstanding obligations, alongside an additional two per cent buffer against potential losses.
The rules also prevent issuers from creating new tokens without first receiving and holding equivalent reserve assets.
The regulation states: “No Licensed Issuer shall issue new stablecoin tokens (mint) unless, at the time of minting, equivalent Eligible Reserve Assets have been received and held in the Reserve Pool.”
The provision is designed to ensure that every newly issued stablecoin is backed by corresponding eligible assets rather than relying on promises of future funding.
Holders will also have the right to redeem their stablecoins at face value, generally no later than the next business day after submitting a valid redemption request. Standard redemptions must be free of charges.
The CBN has equally prohibited algorithmic stablecoins that depend primarily on supply adjustments to maintain their value instead of adequate reserve assets.
Tokens linked to fiat currencies but backed mainly by other cryptocurrencies are also prohibited under the framework.
CBN targets systemically important stablecoins
The regulator is introducing additional supervisory measures for stablecoins that become significant enough to pose potential risks to Nigeria’s financial system.
Under the new rules, a stablecoin will be classified as systemically important if its circulating value exceeds N500bn for 30 consecutive days or its user base surpasses five million people in Nigeria.
Operators behind such tokens will face enhanced regulatory scrutiny because of their potential impact on the broader financial system.
The regulations extend beyond stablecoin issuance to cover cryptocurrency exchanges, digital wallets, payment gateways, remittance providers, custody services and platform-facilitated peer-to-peer transactions.
They also establish compliance obligations covering anti-money laundering, terrorist financing, customer identification, transaction monitoring, cybersecurity, consumer protection and regulatory reporting.
Foreign companies are not exempt from the framework. The rules apply to both Nigerian and overseas operators offering regulated services to customers in the country, regardless of whether they maintain a physical office in Nigeria.
However, the CBN clarified that virtual assets classified as securities will remain under the regulatory authority of the SEC, with both agencies expected to coordinate in areas where their responsibilities overlap.
The new framework therefore places stablecoin issuers and other virtual asset operators under more demanding financial, operational and compliance obligations, as Nigeria moves to strengthen oversight of digital assets and their connection to the country’s financial system.
Leave a comment