Nigeria sets new crypto licensing rules, bans algorithmic stablecoins

The Central Bank of Nigeria (CBN) has introduced new licensing and reserve requirements for cryptocurrency firms, significantly increasing its oversight of stablecoins and digital asset payment services. These measures apply to one of Africa's largest crypto markets.

The “Regulations for the Operations of Non-Security Virtual Assets,” issued on Thursday, establish new guidelines for stablecoin issuers, crypto payment providers, exchanges, custodians, and other covered service providers. These regulations took immediate effect, granting existing operators 180 days to apply for the necessary licenses or authorizations.

Under the new regulations, stablecoin issuers are required to fully back their tokens with reserve assets and maintain an additional buffer equivalent to at least 2% of their value. A minimum of 40% of these reserves must consist of cash or other highly liquid assets.

The rules also mandate a minimum paid-up capital of 10 billion naira ($7.4 million) for naira-backed stablecoin issuers and 15 billion naira ($11.1 million) for those backing foreign currency. Companies offering payment-related crypto services, including exchange and custody, must maintain a minimum paid-up capital of 1 billion naira ($742,000).

The regulations explicitly prohibit stablecoins that rely primarily on algorithms rather than eligible reserves to maintain their value, as well as tokens lacking enforceable redemption rights. These new standards aim to foster responsible innovation while safeguarding consumers and ensuring financial stability.

This development marks a new phase in Nigeria's approach to crypto trading, which has historically been restrictive. Previous measures included limiting banking access for exchanges and efforts to restrict peer-to-peer trading using local currency.

The country gained international attention due to its dispute with Binance, the world's largest cryptocurrency exchange. Binance ceased its Nigerian naira services in March 2024 amidst government scrutiny and allegations of currency manipulation. Nigerian authorities also detained Binance executive Tigran Gambaryan for nearly eight months, with money laundering charges against him being dropped in October 2024.

More recently, Nigeria's revenue agency introduced crypto tax collection rules for digital asset platforms and peer-to-peer marketplaces in August 2026, further illustrating the evolving regulatory landscape.