Nigeria’s central bank has implemented new regulatory measures for cryptocurrency businesses, introducing strict licensing and reserve conditions for stablecoin issuers and digital asset payment services. The Central Bank of Nigeria (CBN), which serves as the country’s primary financial regulator, aims to strengthen oversight of one of Africa’s largest crypto markets.
New virtual asset regulations take effect
The CBN announced the immediate enforcement of its Regulations for the Operations of Non-Security Virtual Assets. These rules apply to stablecoin issuers, cryptocurrency exchanges, payment providers, custodians, and other relevant service operators in Nigeria’s digital asset industry.
Existing virtual asset operators have a 180-day transition period to comply by applying for the necessary licenses or authorizations. The new regulatory framework, according to the CBN, is intended to foster responsible innovation while ensuring the protection of consumers and maintaining financial stability.
The CBN has stated that its regulatory approach is designed to promote a secure environment for responsible development in the crypto sector, with a clear focus on consumer protection and market integrity.
This announcement comes after President Bola Tinubu issued an executive order in July 2024, seeking to harmonize cryptocurrency oversight among national authorities. The order emphasized coordination without revising the core powers of any Nigerian regulatory agency.
Strict capital and reserve requirements for stablecoins
Under the updated regulations, stablecoin issuers are required to fully back their tokens with reserve assets and maintain an additional capital buffer. This buffer must be at least 2% of the stablecoin’s outstanding value. Furthermore, at least 40% of the reserves backing stablecoins must be held in cash or qualifying highly liquid assets.
The rules establish a minimum paid-up capital of 10 billion naira, or $7.4 million, for issuers creating stablecoins backed by the Nigerian naira. For stablecoins backed by foreign currencies, the threshold rises to 15 billion naira, or $11.1 million.
Companies offering cryptocurrency payment services, including exchanges and custodians, are required to maintain a minimum paid-up capital of 1 billion naira, which is equivalent to $742,000.
| Stablecoin type | Min. paid-up capital | Reserve requirements |
|---|---|---|
| Naira-backed | ₦10 billion ($7.4M) | 100% backed + 2% buffer, 40% in cash/highly liquid assets |
| Foreign currency-backed | ₦15 billion ($11.1M) | 100% backed + 2% buffer, 40% in cash/highly liquid assets |
The new rules prohibit stablecoins that rely mainly on algorithms for maintaining their value, as well as tokens lacking enforceable redemption rights. Only stablecoins sufficiently collateralized with eligible reserves can be offered in the Nigerian market.
Mini dictionary: Stablecoin – A type of cryptocurrency that is typically pegged to a stable asset, such as a fiat currency like the US dollar or the Nigerian naira, to minimize price volatility.
Nigeria increases oversight following industry disputes
Nigeria has previously adopted a cautious approach to cryptocurrency trading, restricting banking access for crypto exchanges and imposing limits on peer-to-peer trading denominated in local currency. The country gained widespread attention in the global crypto industry during its public dispute with Binance, which currently stands as the world’s largest cryptocurrency exchange by trading volume.
Binance ended support for naira trading in March 2024, amid increased government scrutiny and allegations regarding foreign currency manipulation. Nigerian government officials also detained Binance executive Tigran Gambaryan for nearly eight months before money laundering charges were dismissed in October 2024.
More recently, Nigeria’s tax authority implemented new rules for collecting taxes on digital assets. These regulations apply to both digital asset platforms and peer-to-peer cryptocurrency marketplaces, starting in August 2026.
Authorities have signaled ongoing efforts to bring digital asset firms under a more comprehensive regulatory and tax framework, reflecting broader concerns over unregulated crypto activities in the country.
