Nigeria Toughens Stablecoin Regulations
New guidelines from Nigeria now demand that foreign stablecoin providers establish a local subsidiary before offering their products to Nigerian consumers. The Central Bank of Nigeria (CBN) has formalized these requirements, which include setting up a Nigerian entity, securing token-specific approvals, meeting capital thresholds, and obtaining separate clearance for payment-related activities. These measures take effect on November 5 and apply to international firms targeting Nigerian users, regardless of whether they operate locally.
The CBN has classified stablecoins into two distinct groups: Class 1 for tokens backed by the naira and Class 2 for those pegged to foreign currencies, including dollar-linked options like USDT and USDC.
Requirements for International Providers
Foreign companies will be barred from serving Nigerian retail investors until they incorporate a local business, secure a Class 2 issuer license, and gain CBN approval for their specific tokens. The Nigerian subsidiary must hold at least NGN15 billion (around $11.1 million) in paid-up capital and ensure sufficient liquidity to honor redemption requests in the country.
Additionally, each token must be fully collateralized by assets matching its reference currency, plus an extra 2% reserve. Issuers are also required to partner with a Nigerian bank to handle redemption transactions domestically.
Payment and Transfer Services Under New Rules
A platform licensed by the SEC can list stablecoins or hold them for clients, but separate CBN authorization is mandatory for any payment services—including transfers, merchant settlements, remittances, payment gateways, or stored-value solutions.
These permissions are not transferable; approval for custody or trading does not extend to peer-to-peer services or cross-border payments. Non-issuer service providers must also maintain a minimum of NGN1 billion (approximately $741,000) in additional capital. Currency conversions between the naira and foreign stablecoins may further require an approved foreign-exchange provider, transaction reporting, and explicit CBN consent.
This multi-layered system ensures that stablecoin issuers, their tokens, and each payment function must individually comply with Nigerian regulatory standards.
Nigeria’s Growing Crypto Economy
Data from Chainalysis shows Nigeria processed $38.1 billion in crypto transactions between July 2025 and June 2026. Peer-to-peer stablecoin activity surged over sixfold from 2022 to 2026, rising from $2.3 billion to $14.6 billion.
The CBN’s approach allows stablecoin operations but insists they operate through locally regulated entities and approved financial channels. Current providers have 180 days to comply, though they may continue operating at existing levels during the transition. Registration deadlines are set at 30 days, with supervisory reporting required within 60 days, meaning any expansion hinges on securing the necessary approvals.
