The Central Bank of Nigeria (CBN) has introduced a comprehensive regulatory framework for stablecoins and other non-security virtual assets, setting minimum capital of ₦15 billion for issuers of foreign-currency tokens and ₦10 billion for naira-referenced tokens.

The Regulations for the Operations of Non-Security Virtual Assets in Nigeria, signed by Musa Jimoh, director of the bank's Payments System Policy Department, took effect on Thursday 5 November. The rules cover stablecoins, deposit money tokens, virtual asset service providers, wallets, exchanges, custodians and platform-facilitated peer-to-peer trading.

Under the framework, issuers of naira-referenced stablecoins, known as Class 1, must maintain at least ₦10 billion in paid-up capital, while issuers of foreign-currency stablecoins, Class 2, need ₦15 billion. Other virtual asset service providers face a ₦1 billion threshold. Existing operators have 180 days to apply for the relevant licence or authorisation.

Reserves, redemption and what tokens are not

Issuers must back tokens in full with eligible reserves, plus a 2 per cent overcollateralisation buffer, and holders must have an enforceable right to redeem tokens at par. Issuers are barred from paying interest or other returns to holders. The rules also state that stablecoins must not be presented as bank deposits or as covered by Nigeria Deposit Insurance Corporation (NDIC) deposit insurance.

The framework applies even to firms based outside Nigeria if their services are directed at Nigerians or could affect the payments system, foreign-exchange market or financial stability. Foreign issuers must obtain a local licence and operate through a Nigerian-incorporated company. Security tokens remain under the Securities and Exchange Commission. The bank says the rules aim to promote responsible innovation while protecting consumers from issuer insolvency, reserve mismanagement and redemption denial.