The Central Bank of Nigeria (CBN) has established a new regulatory framework requiring foreign-currency stablecoin issuers operating in Nigeria, such as USDT and USDC, to hold a minimum paid-up capital of N15 billion. This mandate targets Class 2 issuers, compelling any company seeking to offer dollar-pegged stablecoins locally to meet these capital conditions and obtain a Nigerian licence and Token Approval.
CBN regulatory requirements for stablecoin issuers
Under Section 15.2 of the CBN’s Regulations for the Operations of Non-Security Virtual Assets in Nigeria, effective from November 2026, Class 2 Licensed Issuers must maintain at least N15 billion in paid-up capital. This threshold applies from the first day of licence issuance and must be preserved continually. Class 1 naira stablecoin issuers are subject to a lower requirement of N10 billion, while other non-security virtual asset service providers must hold N1 billion in capital.
The CBN prohibits foreign companies from bypassing these requirements by relying on offshore licences or acting through intermediaries. According to Section 6.5, every Class 1 or Class 2 issuer must be a Nigerian-registered company, and foreign stablecoins can only reach the domestic market through a properly licensed local entity. Stablecoins cannot be offered without Token Approval.
Crucially, regulatory capital must be kept separate from issuer reserves, customer funds, and operating cash. Class 2 issuers are also required to set aside sufficient Operational Liquidity to cover local redemption needs, particularly during stress events. This operational cash is in addition to the mandated reserves and does not count toward the required 2% capital buffer.
| Issuer Type | Minimum Paid-Up Capital | Must Be Nigerian Company |
|---|---|---|
| Class 2 (Foreign Currency Stablecoin) | N15 billion | Yes |
| Class 1 (Naira Stablecoin) | N10 billion | Yes |
| Other Non-Security Virtual Asset Firms | N1 billion | Yes |
Mini dictionary: Central Bank of Nigeria (CBN), the country’s apex monetary authority, oversees financial stability and regulates the banking sector and digital asset activities in Nigeria.
Reserve, redemption, and buffer requirements
Section 24 of the regulation obliges issuers to maintain a Reserve Pool whose value in the reference currency must always match or exceed all outstanding stablecoin liabilities. The reserve must be checked daily, and new tokens can only be minted when corresponding Eligible Reserve Assets are present.
An additional buffer of at least 2% of the circulating face value is required, intended to cover reserve asset price fluctuations and accrued operating costs. This buffer can be accessed only with advance approval from the CBN and may not be released arbitrarily.
Under Section 23, holders have the right to redeem stablecoins at face value, with the issuer required to process and pay by the end of the next business day after a valid request. In cases of system stress, the CBN can extend this window to a maximum of five business days, in accordance with legal limits. Standard redemption transactions will not be subject to fees.
Algorithmic stablecoins that rely solely on supply-and-demand adjustments rather than fully-backed reserves are banned. Additionally, any token marketed as a stablecoin must offer a clear and enforceable redemption right at par value. Stablecoins may be designated as “Systemic Stablecoins” if their Nigerian naira circulation exceeds N500 billion for thirty consecutive days or if they are held or used by more than five million people in the country—a classification that triggers enhanced regulatory oversight.
Implications for stablecoin access in Nigeria
With this regulatory approach, the CBN seeks to clarify who holds responsibility and financial backing for stablecoin offers in Nigeria. These measures increase the cost and operational standards for any operator planning to distribute dollar-denominated stablecoins, requiring a robust capital base, local incorporation, and compliance checks before participating in the market.
While capital is distinct from reserve backing, the N15 billion minimum, combined with requirements for full local reserves plus the 2% buffer, creates a high compliance bar before new stablecoins can circulate within the country. Face-value redemption on the next business day becomes a concrete obligation for locally licensed issuers.
Operators seeking to offer USDT, USDC, or similar tokens must partner with a Nigerian company that holds a Class 2 licence, sustain N15 billion in paid-up capital, secure Token Approval, and guarantee daily-backed reserves with a buffer. Redemption at face value by the next business day is mandatory for compliant issuers.
The CBN’s move aligns with similar policies abroad, such as Taiwan’s NT$300 million capital floor for nonbank stablecoin issuers, but Nigeria’s requirements are among the most stringent for foreign-currency stablecoins by combining a high capital threshold with local company control.
Dollar-pegged stablecoins can still be minted offshore, but Nigerian distribution, custody, exchange, and redemption must operate through companies that comply with the new Class 2 licence process. Current operators will have 180 days from the commencement of the regulation to apply for the necessary licences, with interim limits during the transition and no waivers from local company requirements.
The official start date for these requirements will be listed in the CBN’s issuing note. Until licences and Token Approvals are issued, stablecoin operators must meet the full capital and compliance criteria to lawfully engage with Nigerian users. The structure puts the focus on who can make and support stablecoin promises domestically, demanding local accountability and reserves.
