November 10, 2026/CSL Update
The Central Bank of Nigeria (CBN) has introduced a comprehensive regulatory framework governing the operations of non-security virtual assets in the country. This includes guidelines on licensing, capital, reserve, and operational requirements for stablecoin issuers and other virtual asset service providers. We note that the key aim of the framework is to strengthen oversight of virtual asset activities, safeguard financial stability and consumer interests, and mitigate potential risks to the effectiveness of monetary policy.
Under the framework, stablecoin issuers are required to obtain the appropriate CBN licence, with minimum paid-up capital requirements of ₦10.0bn for naira-referenced stablecoins (Class 1) and ₦15.0bn for foreign currency-referenced stablecoins (Class 2). Other virtual asset service providers are subject to a minimum capital requirement of ₦1.0bn. Issuers must also maintain reserve assets sufficient to fully back outstanding stablecoin obligations, including a minimum 40.0% allocation to cash or qualifying high-quality liquid assets.
Additionally, Class 1 issuers are required to maintain at least 20.0% of their reserve pool in a CBN reserve deposit account. The regulations also establish enforceable redemption rights, requiring issuers to redeem stablecoins at par value no later than the end of the business day following receipt of a valid redemption request, subject to specified exceptions.
From a monetary policy perspective, the framework could strengthen the CBN’s oversight of digital financial flows, particularly through stricter approval, customer verification and transaction-monitoring requirements for platform-facilitated peer-to-peer (P2P) transactions.
Combined with restrictions on the use of foreign currency-referenced stablecoins for settling domestic Naira obligations, these measures could improve visibility over digital FX activity and help contain currency substitution, although their impact on exchange-rate stability and inflation is likely to be indirect. For the financial services industry, higher capital and compliance requirements could raise entry barriers for smaller operators, potentially encouraging consolidation and partnerships with better-capitalised institutions.
Conversely, provisions for Deposit Money Tokens (DMTs), which represent existing Naira deposit liabilities in tokenised form, create opportunities for regulated banks to participate in digital payment infrastructure, subject to prior CBN approval.