Central Bank of Nigeria Mandates Local Licences for Offshore Stablecoin Issuers

Foreign stablecoin issuers must incorporate in Nigeria and obtain local authorisation to offer tokens in the country, under a rulebook published by the Central Bank of Nigeria (CBN) that took effect on Nov. 5 ¹. The framework eliminates offshore exemptions, preventing foreign-regulated firms from relying on international permits to serve domestic users ¹.

Under the new guidelines, stablecoins tied to foreign currencies—including dollar-pegged assets—are classified as Class 2 virtual assets ¹. Only domestic corporate entities licensed by the CBN can issue Class 2 tokens, and domestic platforms may only list tokens that secure formal central bank approval ¹. The CBN stated that foreign licences cannot replace domestic licensing or asset approval ¹. Unlicensed operations face penalties starting at 100 million naira, with an additional fine of at least 1 million naira for every day of non-compliance ¹.

Capital Rules and Issuer Restrictions

The central bank outlined strict capital requirements and reserve conditions ¹. Class 2 issuers backing tokens with foreign currencies must maintain at least 15 billion naira in paid-up capital, while Class 1 issuers backing naira-pegged tokens must hold 10 billion naira ¹. Other virtual asset service providers, covering payment, custody, wallet, and exchange operators, must hold a minimum of 1 billion naira ¹. Issuers must fully back tokens with an extra 2% overcollateralisation buffer, and Class 1 issuers must deposit at least 20% of their reserve pool as cash directly with the CBN ¹.

The rulebook also bans algorithmic stablecoins, tokens collateralised primarily by other crypto assets, and assets that fail to provide holders an enforceable right to par redemption ¹. Issuers are barred from offering interest or yields on token holdings ¹.

To manage market continuity, the CBN established a transition period ¹. Operators wishing to maintain existing business volumes must register with the regulator within 30 days, establishing a deadline of Dec. 5 ¹. Existing firms have 180 calendar days—until May 4, 2027—to submit formal licence applications ¹. The regulatory overhaul follows an executive order establishing a Virtual Asset Council, while tokens classified as securities remain under the jurisdiction of the Securities and Exchange Commission ¹. At the time of writing, $USDT traded at $0.9986 as the broader market assessed the compliance implications of regional licensing overhauls, as seen across other jurisdictions exploring stablecoin regulation.