The Central Bank of Nigeria (CBN) has introduced a regulation requiring all issuers of foreign-currency stablecoins, such as USDT and USDC, to maintain a minimum paid-up capital of N15 billion. These requirements are detailed in the November 2026 “Regulations for the Operations of Non-Security Virtual Assets in Nigeria.”
New capital rules for stablecoin issuers
To legally offer stablecoins pegged to foreign currencies in Nigeria, a local company must secure a Class 2 issuer license as well as Token Approval. The CBN does not accept foreign licenses or arrangements made through intermediaries. Instead, the bank requires that any entity distributing foreign-currency stablecoins to Nigerian residents must have a physical presence in the country and demonstrate sufficient local capital reserves.
Section 15.2 of the regulation specifies that a Class 2 licensed issuer must have at least N15 billion in paid-up capital at all times. The CBN also reserves the right to increase this amount in the future. By comparison, issuers of naira-backed tokens, classified as Class 1, must hold a lower capital base of N10 billion, while other virtual asset service providers are subject to a N1 billion floor.
Foreign stablecoin issuers are not exempted from these requirements. Section 15.3 explicitly mandates domestic incorporation and licensing for all local distribution or redemption activities, closing possible shortcuts for offshore agents.
| Issuer Type | Minimum Paid-Up Capital | License Requirement |
|---|---|---|
| Class 2 (Foreign-currency stablecoins) | N15 billion | Local company, Class 2 issuer license, Token Approval |
| Class 1 (Naira stablecoins) | N10 billion | Local company, Class 1 issuer license |
| Other virtual asset firms | N1 billion | Relevant license |
Each Class 1 issuer must also be a Nigerian entity. Foreign-currency stablecoins may only be issued to Nigerians through a licensed Class 2 structure. Licensees are forbidden from distributing tokens that have not received explicit regulatory clearance.
Importantly, the regulatory capital requirement is separate from the reserves backing the stablecoins. Capital serves as a financial safeguard distinct from customer funds, operating cash, and the reserves that anchor the token’s peg. Class 2 issuers must maintain operational liquidity to cover redemptions and debts, especially during stress periods, in addition to a statutory reserve buffer.
Reserve pool, 2% buffer, and redemption windows
Under Section 24, all issuers must keep a Reserve Pool whose value in the reference currency always equals or surpasses the total supply of stablecoins outstanding. This pool must be matched daily and maintain a one-to-one backing at all times. New tokens cannot be issued unless equivalent eligible assets are already held in reserve. The regulation also imposes a mandatory 2% buffer above circulating supply to absorb price fluctuations and operational expenses. Accessing the buffer requires prior approval from the CBN.
Section 23.2 establishes a strict redemption timeline, guaranteeing holders the right to redeem tokens at face value by the end of the next business day after a valid request. Standard redemptions are fee-free, though the regulatory framework allows for up to five business days in extraordinary stress scenarios, subject to legal caps.
Section 24.4 requires an additional buffer of at least two percent of the circulating face value, which may not be released without the Bank’s prior approval and is intended to cover reserve price losses and operating costs.
The CBN also bans algorithmic stablecoins, which rely on supply mechanisms instead of tangible eligible reserves, and prohibits the labeling of any token as a stablecoin unless it guarantees holders the right to redemption at face value.
Tokens can be classified as Systemic Stablecoins if their circulating value exceeds N500 billion for thirty consecutive days or if more than five million Nigerians hold or use them, leading to increased regulatory oversight.
Mini dictionary: Systemic Stablecoin — A stablecoin designated by regulators as systemically important when it reaches certain thresholds of value or user base, leading to more stringent supervision due to its potential effect on the financial system.
Impacts on USDT, USDC, and market access
In practical terms, the regulations mean that for dollar-pegged stablecoins like USDT and USDC to be offered within Nigeria, a local entity must provide a legally binding guarantee and maintain significant local capital and reserves. The CBN seeks a clear balance sheet behind the peg, not just an overseas issuer’s assurances.
While capital requirements are not a direct mechanism for maintaining the peg, they serve as an entry filter. The required Reserve Pool and 2% buffer further enforce robust backing for all stablecoins in circulation. Redemption at face value by the next business day moves the stablecoin promise from a marketing statement to a regulatory obligation within the Nigerian legal framework.
Nigeria’s approach follows global trends, with similar measures recently implemented in Taiwan, where nonbank stablecoin issuers must hold NT$300 million. However, Nigeria’s capital requirement for foreign-currency stablecoins is higher and is combined with mandatory domestic incorporation.
The objective is not to prohibit foreign stablecoins but to reshape their distribution channels and compliance standards. While global issuance may continue, offering, holding, exchanging, and redeeming foreign-currency stablecoins in Nigeria now requires the explicit approval and oversight of a local Class 2 license holder.
Existing providers have been granted a transition period. Operators must submit license applications within 180 calendar days from the regulation’s start date and initiate registration within 30 days. There is no permanent exemption for foreign operators seeking market access.
The CBN will specify the start date in a separate issuing note. Until licenses and Token Approvals are granted, foreign-currency stablecoins seeking access to Nigeria must satisfy the new capital, reserve, and redemption standards. Ultimately, who may issue and stand behind dollar-pegged tokens onshore in Nigeria now has a clear regulatory answer.
