New rules from Nigeria’s Central Bank (CBN) will require foreign-currency stablecoin issuers, including companies behind dollar-pegged tokens such as USDT and USDC, to maintain at least ₦15 billion ($11.16 million) in paid-up capital to operate in Africa’s largest cryptocurrency market.
The rules, released Thursday evening, will require foreign stablecoin issuers to establish licenced entities in Nigeria and comply with local capital, reserve, and operational requirements or risk losing market access. The CBN also set a ₦10 billion ($7.44 million) minimum capital requirement for issuers of naira-backed stablecoins.
The regulations come nearly three months after the CBN opened the second cohort of its regulatory sandbox in August, creating a dedicated track for stablecoin issuers and other virtual asset companies to test their products under its supervision for the first time.
The new framework creates a formal licencing system for stablecoins, digital tokens that are intended to maintain a fixed value against fiat currencies such as the US dollar or naira. Businesses and individuals in Nigeria use tokens to move money across borders, settle transactions, and access the dollar.
The new rules come as major issuers push to expand their presence in the country. In August, Tether, the El Salvador-based company behind USDT, sought to hire an Expansion Manager in Nigeria. This week, Circle, the US company that issues USDC, appointed Gillian Darko, a former strategy executive at stablecoin infrastructure company Yellow Card, as its Vice President and Head of Africa.
The move underscores Africa’s growing importance to global stablecoin companies, even as regulators seek greater control over how dollar-backed digital assets are distributed and used within their borders.
Under the CBN’s new regulations, foreign-currency stablecoins can only be offered, distributed, or made available to Nigerians through a locally incorporated and licenced issuer. Foreign regulatory approvals will not exempt the companies, such as Tether and Circle, from meeting Nigeria’s requirements.
Issuers must also maintain reserves backing their tokens, establish arrangements for customers to redeem them, and submit regular reports to the regulator. The CBN will require monthly reserve attestations and may impose additional capital or liquidity requirements on issuers considered a risk to the financial system.
Existing operators will have 180 days from the date the regulations take effect to apply for a licence, although the CBN has yet to specify when that period will begin. Companies must register with the regulator within 30 days and begin submitting supervisory reports within 60 days.
“Failure to submit within that period shall require cessation until the required licence or authorisation is obtained,” the CBN said.
Foreign-currency stablecoin operators will also face scrutiny over their Nigerian incorporation, licencing, and distribution arrangements. Companies seeking to continue operating while their applications are reviewed must obtain explicit regulatory permission.
The new rules also ban algorithmic stablecoins, digital currencies that rely primarily on adjustments to token supply to maintain their value without sufficient reserve backing. Unlike conventional stablecoins backed by fiat currencies or other valuable assets such as gold, their dependence on algorithms makes them more vulnerable to sudden losses in value and harder to regulate.
With this framework, the CBN seeks greater oversight of non-security virtual assets used for payments, including stablecoins, as they play an emerging role in how businesses and merchants move money across borders and source foreign exchange (FX), and how fintechs access dollar liquidity to pre-fund international payments and settlements.