CBN Now Requires Foreign Stablecoin Issuers to Maintain ₦15 Billion in Paid-Up Capital to Operate in Nigeria

TL;DR

• The Central Bank of Nigeria released a framework for non-security virtual assets on 5 November 2026. The framework covers licensing, deposit money tokens, peer-to-peer trading, and cross-border transactions.
• The new rules require foreign-currency stablecoin issuers (Class 2), such as Circle and Tether, to set up a Nigerian entity and hold at least ₦15 billion in paid-up capital. Naira-backed issuers (Class 1) need ₦10 billion.
• Stablecoin issuers are required to pay a ₦10 million non-refundable application fee and a ₦5 million annual renewal fee. Other VASPs face a separate ₦1 billion capital floor on top of SEC requirements.
• The rules list penalties, including fines starting at ₦100 million for operating without a license. They also set per-breach fines of ₦250 million to ₦500 million for reserve leverage.
• Existing operators have 180 days from commencement to apply, 30 days to register and 60 days to begin supervisory reporting. 

The Central Bank of Nigeria has published a 169-page guideline designed for non-security virtual assets in the country. The circular, titled Regulations for the Operations of Non-Security Virtual Assets in Nigeria, was published on November 5, 2026. It establishes a formal licensing and supervisory framework for digital payment instruments across the country. 

The CBN’s document includes rules on deposit money tokens, peer-to-peer trading, cross-border transactions, and licensing. Notably, it outlines guidelines for stablecoin issuance that impact major global stablecoin issuers such as Circle or Tether.

CBN’s Requirements For Foreign Stablecoin Issuers

The Central Bank of Nigeria has separated stablecoin issuers into two categories. Class 1 stablecoins are naira-backed stablecoins. Class 2 stablecoins are stablecoins pegged to foreign currencies. Foreign stablecoin issuers (Class 2 issuers) like Circle or Tether are required to establish and maintain a Nigerian corporate entity. To obtain a licence, stablecoin issuers, regardless of category, are required to pay:

• A non-refundable 10 million naira application fee,
• An annual licence renewal fee of 5 million naira, and 
• The cost of examination as assessed by the Central Bank. 

Class 2 issuers are required to maintain a minimum paid-up capital of 15 billion naira (over $11 million). This capital must be held as cash or as federal government securities under a CBN lien and cannot be withdrawn without approval.

The CBN also mandates that the reserve assets must fully cover all the circulating tokens on a 1:1 basis and an additional buffer of at least 2% of the total circulating par value. In addition to the capital and reserves, Class 2 issuers must also keep operational liquidity to meet Nigerian redemptions. This includes:

• $10 million or the equivalent in the currency the foreign stablecoin is pegged to,
• 15% of Nigerian-linked liabilities and
• the amount needed to cover 30 days of stressed redemptions.

They are also required to perform daily internal asset-to-token reconciliations and publish independent monthly reserve attestations prepared by an approved auditor. The attestation must be published within 15 business days following the month’s end.

The framework also bars Class 1 and Class 2 issuers from paying interest, yields, or other returns to users for simply holding or depositing a stablecoin, a feature also mentioned in Kenya’s regulations. 

CBN’s Requirement for Local Stablecoin Issuers and VASPs

Class 1 issuers are required to maintain a paid-up capital of 10 billion naira. For reserves, the CBN requires at least 20% in a CBN reserve deposit account and at least 40% more in cash and high-quality liquid assets.

In addition to the SEC’s capital requirements, other virtual asset service providers (VASPs) operating in non-security virtual asset settlement, such as exchanges or payment gateways, are subject to a minimum 1 billion paid-up capital floor.

Algorithmic Stablecoins are Banned

The CBN has also banned algorithmic stablecoins. It defines algorithmic stablecoins as tokens that rely primarily on supply adjustments, rebalancing mechanics, or automated pool re-weights to maintain parity, rather than direct backing by real-world eligible reserve assets. 

​It also bans fiat-referenced tokens backed primarily by volatile virtual assets and those lacking explicit par-value redemption rights from entering the domestic financial ecosystem.

Penalties and the Transition Period

The CBN has given existing entities 180 calendar days from the formal regulatory commencement date to complete and submit full licensing applications. Unlicensed operators currently operating in the market must register their active presence with CBN within 30 days and begin formal supervisory reporting within 60 days.

The circular also outlines the penalties for noncompliance:

• Operating without the required licence and authorisation carries a fine of at least 100 million naira. Each day the breach continues adds 1 million naira to the fine. 
• Using reserves as leverage or encumbering them is punishable by a fine of 250 million to 500 million naira per breach.
• Paying interest or yield to holders is fined at twice the amount paid.
• Fraudulent misrepresentation about reserves or operations to the CBN or the public can lead to criminal prosecution and a minimum fine of 500 million naira. 

What This Means for Circle, Tether and Nigeria’s Market

Recent data values Nigeria’s crypto economy at $38.1 billion. The IMF previously reported that Nigeria has accounted for 60% of stablecoin inflows to sub-Saharan Africa and urged the government to regulate their use. That large market and preference for dollar-backed stablecoins have attracted dollar-backed stablecoin giants Circle and Tether to the market. 

CBN’s rules arrive at an interesting time for the market. Institutions and banks in the country have shown increased interest in stablecoins and digital assets. Foreign interest in the market has also increased.

Circle recently announced Gillian Darko as head of its African operations, a move designed to strengthen the company’s African expansion. This follows the company’s investment in Nigerian-founded fintech Flutterwave. Tether partnered with Nigerian exchange Busha in July and started recruiting for an expansion manager in Nigeria two months ago. 

While these new capital and compliance requirements make stablecoin issuers and the broader crypto service providers more accountable, they raise the cost of serving the Nigerian market. They might consolidate market access around large corporate players. It remains to be seen how global stablecoin issuers respond and how this will impact adoption and operations in the country.