The Central Bank of Nigeria (CBN) has issued new regulations for non-security virtual assets that take effect immediately, prohibiting algorithmic stablecoins and establishing strict capital requirements for market participants.
The Regulations for the Operations of Non-Security Virtual Assets, released on Thursday, mandate that existing operators apply for licenses or authorizations within 180 days. The framework explicitly bans stablecoins that rely primarily on algorithms rather than eligible reserves to maintain their value, as well as tokens that lack enforceable redemption rights.
Reserve and capital mandates
Under the new rules, stablecoin issuers must fully back their tokens with reserve assets and maintain an additional buffer equal to at least 2% of their value. At least 40% of these reserves must consist of cash or qualifying highly liquid assets.
The CBN set distinct minimum paid-up capital thresholds based on the type of service provided. Issuers of naira-backed stablecoins must hold 10 billion naira ($7.4 million), while those issuing foreign currency-backed stablecoins require 15 billion naira ($11.1 million). Companies providing payment-related crypto services, including exchange and custody operations, must maintain a minimum paid-up capital of 1 billion naira ($742,000).
The central bank stated that the framework aims to support responsible innovation while protecting consumers and financial stability.
Regulatory coordination
This regulatory update follows President Bola Tinubu’s July executive order, which sought to coordinate crypto oversight among Nigerian authorities without altering their existing powers. The new guidelines provide a structured pathway for compliant operations while excluding high-risk algorithmic models from the Nigerian market.
