Nigeria’s Central Bank Strengthens Crypto Regulations with New Licensing and Reserve Requirements

On Thursday, the CBN published the Regulations for the Operations of Non-Security Virtual Assets, setting standards for stablecoin issuers, crypto payment providers, exchanges, custodians, and other related services.

These regulations are effective immediately, yet existing companies have a 180-day window to submit applications for the required licenses or permits. The CBN emphasized that the framework is designed to foster responsible innovation while ensuring consumer protection and maintaining financial stability.

This policy update follows a July executive order from President Bola Tinubu aimed at harmonizing cryptocurrency oversight among Nigerian authorities without altering their respective authorities.

Under the new rules, stablecoin issuers must fully back their digital tokens with reserve assets and hold an additional reserve buffer of at least 2% above the token value. At least 40% of these reserves have to be in cash or equivalent highly liquid assets.

The regulations specify minimum paid-up capital thresholds: 10 billion naira (approximately $7.4 million) for stablecoins backed by the naira, and 15 billion naira (around $11.1 million) for those backed by foreign currencies.

Moreover, firms offering cryptocurrency payment services, such as exchanges and custody solutions, are required to maintain a minimum paid-up capital of 1 billion naira (about $742,000).

The framework bans stablecoins that depend mainly on algorithmic mechanisms rather than fully backed reserves, as well as tokens that lack enforceable redemption rights.

Nigeria is intensifying its restrictive stance on cryptocurrency trading, having previously limited bank access for crypto exchanges and sought to reduce peer-to-peer transactions in local currency.

The country gained international notice for its conflict with Binance, the largest cryptocurrency exchange globally by trading volume.

In March 2024, Binance ceased Nigerian naira operations amid heightened government scrutiny of crypto activities and accusations of currency manipulation. Nigerian officials also detained Binance executive Tigran Gambaryan for nearly eight months before dropping money laundering charges against him in October 2024.

In August 2026, Nigeria’s tax agency implemented regulations to collect taxes from digital asset platforms and peer-to-peer marketplaces.

The new regulations mark a significant tightening of Nigeria’s cryptocurrency framework, aiming to strengthen market integrity and consumer safeguards in a rapidly evolving sector.

The importance lies in the Central Bank’s efforts to balance fostering innovation with protecting the financial system and consumers amid increasing crypto adoption and previous regulatory challenges.

The enhanced capital and reserve requirements for stablecoins and payment service providers set a higher threshold for market participants, increasing transparency and reducing risks associated with undercollateralized digital assets.