Nigeria’s central bank has put a licensing regime for non-security virtual assets into force, including naira- and foreign-currency-referenced stablecoins, and has barred algorithmic designs. According to a Central Bank of Nigeria circular dated November 5, 2026, the “Regulations for the Operations of Non-Security Virtual Assets in Nigeria” take effect that day. The Block reported the same effective date and the Class 1 / Class 2 issuer split.
The rules cover issuance, distribution, custody, transfers, remittances, clearing and settlement, and platform-facilitated peer-to-peer services. They apply to activity in or from Nigeria, directed at people in Nigeria, or that may materially affect Nigeria’s payments or foreign-exchange system, even without a physical presence in the country. Existing operators face a 180-day application clock that is not an open grace period.
Two issuer classes and per-token approval
The regulations create Naira-Referenced Stablecoins (Class 1) and Foreign Currency-Referenced Stablecoins (Class 2), plus Deposit Money Tokens and other tokens the Bank may designate. A Class 1 coin must reference the naira one-to-one, be fully backed by naira-denominated eligible reserve assets, and be issued by a Nigerian-incorporated Class 1 licensed issuer.
A foreign-currency-referenced stablecoin may be offered, marketed, distributed, exchanged, held in custody, redeemed or otherwise made available to people in Nigeria only as a Class 2 coin issued through a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence. A foreign licence or an arrangement with a Nigerian intermediary shall not substitute for that licence or for Token Approval.
Token Approval covers a token’s class, reference currency, reserve arrangements, name, ticker and blockchain networks. “Token Approval does not imply a guarantee by the Bank,” the definitions section states. Issuance may not start until that approval is granted. Class 2 Token Approval “shall not permit its use to settle, price or discharge a domestic obligation denominated in Naira, except where expressly permitted under applicable foreign-exchange or other law.” A firm may not hold both a Class 1 and a Class 2 issuer licence without the Bank’s express prior written approval.
Section 15 sets paid-up capital at ₦10 billion for Class 1 issuers and ₦15 billion for Class 2 issuers, or higher amounts the Bank may prescribe. Other non-security virtual asset service providers face a ₦1 billion minimum under Section 16. Class 1 and Class 2 stablecoins “shall not be represented as bank deposits or as covered by NDIC deposit insurance.”
What is banned
Section 2.2 lists Prohibited Tokens that shall not be issued, offered, distributed or traded in Nigeria, starting with “Algorithmic Stablecoins, being tokens that seek to maintain a stable value solely or primarily through algorithmic adjustment of supply or demand rather than full backing by Eligible Reserve Assets.” Also prohibited are fiat-referenced tokens backed wholly or primarily by other virtual assets; tokens issued by or on behalf of sanctioned persons or persons in sanctioned jurisdictions; tokens marketed as stablecoins without an enforceable right of redemption at par; and any other token the Bank finds poses an unacceptable risk to monetary or financial stability, financial integrity or consumers. The circular does not name any live branded token as banned or licensed.
Transition clocks and systemic thresholds
Under Section 54.1, an existing operator must apply within 180 calendar days of commencement. It may continue only at its existing scale and under interim conditions if it registers within 30 days, meets AML/CFT/CPF requirements from day one, begins supervisory reporting within 60 days or earlier as prescribed, and files a complete application in time. Failure to submit “shall require cessation until the required licence or authorisation is obtained.” Existing Class 2 arrangements need Nigerian incorporation and express interim permission during assessment; that permission is not a permanent exemption.
The Bank shall designate a Class 1 or Class 2 coin as a Systemic Stablecoin where naira-equivalent circulating supply exceeds ₦500 billion on each day for 30 consecutive days, or where more than 5 million people in Nigeria hold or use it, based on supervisory data.
CBN and SEC Nigeria
The circular says the framework does not displace the Securities and Exchange Commission. Security virtual assets stay with the SEC. Activities that span both mandates need approvals from each authority. The regulations cite a Presidential Executive Order on Virtual Assets Coordination, 2026, and a Virtual Asset Council for classification disputes; that citation is in the PDF and was not independently confirmed beyond it. AML/CFT/CPF duties cover custodial wallets, peer-to-peer services and remittance channels, including Travel Rule compliance. A licence, authorisation, Token Approval or capital deposit shall not be represented as a Bank endorsement or guarantee.
AltcoinReporter has covered Hong Kong’s first stablecoin licences to HSBC and Standard Chartered and Hong Kong’s Ensemble TX settlement network as the HKMA prepared stablecoin trials. Nigeria’s rules add the algorithmic ban, dual capital floors, and extra-territorial reach.
What to watch next
Watch whether existing foreign-currency coins used in Nigeria get interim permission while Class 2 applications are assessed, and whether any firm seeks a dual-licence waiver. The first Token Approvals will show how the Bank applies the rulebook. The regulations do not name any specific dollar or naira token as approved or banned.
FAQ
When do Nigeria’s new stablecoin rules take effect? The Central Bank of Nigeria circular says they take effect from November 5, 2026.
Are algorithmic stablecoins banned in Nigeria? Yes. Section 2.2 prohibits algorithmic designs and also bans fiat-referenced tokens backed mainly by other virtual assets, tokens issued by or on behalf of sanctioned persons or persons in sanctioned jurisdictions, and tokens marketed as stablecoins without an enforceable right of redemption at par.
Can a foreign issuer sell a dollar stablecoin to Nigerians under a foreign licence alone? No. Foreign-currency-referenced stablecoins may reach people in Nigeria only as Class 2 tokens issued through a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence, plus Token Approval.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
