CBN Sets ₦10bn and ₦15bn Capital Floors for Stablecoin Issuers
The Central Bank of Nigeria has introduced capital, reserve and redemption requirements for companies that want to issue stablecoins in Nigeria.
Under the newly released Regulations for the Operations of Non-Security Virtual Assets in Nigeria, a Class 1 issuer of a naira-referenced stablecoin must maintain paid-up capital of at least ₦10 billion. A Class 2 issuer, covering tokens referenced to a foreign currency such as the United States dollar, must maintain at least ₦15 billion.
The capital belongs to the issuing company and must remain separate from the assets held to support customer redemptions. The rules allow the CBN to impose a higher requirement where an operator’s transaction volume, market importance, redemption obligations or technology risks justify closer supervision.
Reserve and redemption safeguards
The regulations require issuers to maintain reserve assets covering the value of tokens in circulation, together with an additional buffer. Valid redemption requests are expected to be completed no later than the end of the next business day.
The framework also prohibits algorithmic stablecoins and fiat-linked tokens backed mainly by other cryptocurrencies. Foreign-currency stablecoins intended for the Nigerian market must be issued through a locally incorporated and CBN-licensed entity; an overseas licence does not replace Nigerian authorisation.
Existing operators have been given a transition period to seek the required approval. Falling below the applicable capital threshold triggers an immediate notification duty and a capital-restoration plan within ten business days. The CBN may restrict new issuance or customer onboarding until the shortfall is corrected.
Why the rules matter
Stablecoins are digital tokens designed to maintain a reference value, commonly against a national currency. Their usefulness for transfers and digital payments depends heavily on whether holders can redeem them promptly and whether the stated reserves actually exist.
The new framework therefore places responsibility on issuers to demonstrate capital strength, liquidity, reserve management and operational resilience. It does not make every existing crypto token legal tender, nor does it remove other regulatory requirements that may apply.
Sources: Central Bank of Nigeria regulations; Guardian report on the new framework.
Featured image: illustrative photograph by Traxer/Unsplash. It does not depict a particular Nigerian stablecoin operator.
