Community Trust ScoreVerified
The Central Bank of Nigeria issued a circular and accompanying regulations on November 5 establishing a licensing framework for non-security virtual assets, including stablecoins, payment services, custody, transfers, and remittances. The new rules introduce specific capital requirements and operational standards for entities issuing or managing these digital assets within the Nigerian jurisdiction.
Capital Requirements and Token Classes
The framework distinguishes between two classes of stablecoin issuers based on the currency backing the token. Class 1 applies to naira-linked issuers, while Class 2 covers foreign-currency-backed tokens. The regulations set minimum paid-up capital requirements of 10 billion naira for Class 1 issuers and 15 billion naira for Class 2 issuers. The Central Bank of Nigeria retains the authority to prescribe capital amounts higher than these minimum thresholds.
Each specific token requires individual approval from the regulator. Issuers must provide detailed information regarding their reserves, redemption processes, supported networks, governance structures, and associated risks. The rules are designed around backing and redemption mechanisms, explicitly restricting algorithmic arrangements that rely primarily on market mechanisms rather than eligible reserve assets to maintain value.
Jurisdictional Scope and Compliance
The circular states that the framework applies to regulated activities conducted in or from Nigeria, directed at Nigerian residents, or materially affecting Nigerian payment and financial systems. Physical absence from Nigeria does not necessarily exempt an entity from these obligations. International stablecoin businesses cannot assume that having a foreign issuer or a smart contract operating outside the country places them outside the regulator’s reach.
The Central Bank of Nigeria distinguishes its payments and non-security remit from the responsibilities of the Nigerian securities regulator. Investment-like tokens may trigger separate oversight by the securities regulator, meaning the legal classification of a digital product determines which authority exercises jurisdiction. The framework includes mandatory obligations for anti-money-laundering checks, sanctions screening, transaction monitoring, asset safeguarding, and customer disclosures. Transitional provisions exist for existing operators, though the specific deadlines and authorisation obligations are detailed in the official regulatory text.
Frequently Asked Questions
What are the minimum capital requirements for stablecoin issuers in Nigeria?
Class 1 naira-linked issuers must have a minimum paid-up capital of 10 billion naira. Class 2 foreign-currency-backed issuers must have a minimum paid-up capital of 15 billion naira.
Does the new framework apply to foreign stablecoin platforms?
Yes, the framework applies to activities conducted in or from Nigeria, directed at Nigerian residents, or materially affecting Nigerian financial systems, regardless of the issuer’s physical location.
