Nigeria Bans Algorithmic Stablecoins and Sets ₦15 Billion Capital Rule for Issuers

Published November 8, 2026, 5:07 PM PKT. Based on the Central Bank of Nigeria's Regulations for the Operations of Non-Security Virtual Assets in Nigeria, published November 5, 2026 (primary source), and reporting from crypto.news, Crypto Briefing and Blockrora.

Nigeria's central bank has banned algorithmic stablecoins outright and ordered every stablecoin issuer serving Nigerians to get licensed, hold full reserves and put up billions of naira in capital, under a 169-page framework that took effect on November 5, 2026. The Central Bank of Nigeria (CBN) published the Regulations for the Operations of Non-Security Virtual Assets in Nigeria as a circular from its Payments System Policy Department, signed by director Musa Jimoh, and the rules apply immediately to firms operating in Nigeria, firms targeting Nigerian customers from overseas, and any service that affects the country's payments system or foreign exchange market.

The framework is the most complete stablecoin rulebook yet from Africa's largest economy, and it closes a gap that had left issuers operating under a patchwork of older guidance. Nigeria is one of the world's heaviest users of stablecoins for payments, savings and cross-border transfers, and the International Monetary Fund warned in June that growing stablecoin use could complicate the country's monetary policy and foreign exchange management, crypto.news reported.

Algorithmic stablecoins are banned outright

Section 2.2 of the regulations lists five categories of Prohibited Tokens that may not be issued, offered, distributed or traded in Nigeria. At the top of the list are algorithmic stablecoins, defined in the document as tokens that seek to hold a stable value solely or primarily through algorithmic adjustment of supply or demand rather than full backing by eligible reserve assets.

The ban also covers tokens that reference a fiat currency but are backed wholly or primarily by other virtual assets, tokens issued by or on behalf of a sanctioned person or a person in a sanctioned jurisdiction, and tokens marketed as stablecoins that do not give holders an enforceable right to redeem at par. The central bank reserved the right to prohibit any other token it determines poses an unacceptable risk to monetary or financial stability, financial integrity or consumers.

Anyone who issues, offers, distributes or facilitates access to a Prohibited Token in Nigeria faces the enforcement and administrative measures set out in Part 11 of the regulations, the document states. The rules also forbid promoting a Prohibited Token or misstating a product's licensing status in advertising.

The 15 billion naira bar for foreign-currency issuers

The framework splits stablecoins into two classes. Class 1 covers naira-referenced stablecoins, which must reference the naira one-to-one and be fully backed by naira-denominated reserve assets. Class 2 covers foreign-currency-referenced stablecoins, such as dollar-backed tokens, which must be issued by a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence.

Issuers of naira-backed tokens must maintain at least 10 billion naira in paid-up capital, about $7.4 million, while issuers of foreign-currency tokens must hold at least 15 billion naira, about $11.1 million, on entry and at all times afterwards, according to the regulations and reporting by crypto.news. Companies offering other regulated virtual asset services, such as exchange and custody, face a 1 billion naira capital floor. The central bank can demand higher amounts depending on a company's activities and risk profile.

Foreign companies cannot rely on licences obtained in other jurisdictions or on agreements with Nigerian intermediaries, crypto.news reported. Each issuer must obtain local authorisation before making its tokens available to Nigerian customers, and every stablecoin needs separate written approval from the CBN, with applications identifying the token's reference currency, reserve arrangements, name, ticker and supported blockchain networks.

Full reserves, a 2 percent buffer and redemption at par

Approved stablecoins must hold eligible reserve assets sufficient to cover the full value of outstanding tokens at all times, plus an additional buffer of at least 2 percent of the value in circulation, the regulations state. Issuers may not create new tokens before the corresponding reserve assets have been received, and they must reconcile reserves against outstanding token liabilities every day.

At least 40 percent of the reserve pool must be held in cash or high-quality liquid assets, with non-cash holdings maturing within six months, according to reporting on the document. Naira-backed issuers must also keep at least 20 percent of their reserve pool as a cash deposit with the central bank. Holders have an absolute right to redeem at par, generally within one business day, and issuers may not pay holders interest or yield on their tokens.

The framework also imposes customer identity verification, sanctions screening and transaction monitoring, and requires operators to follow anti-money laundering and counter-terrorist financing rules, including Travel Rule obligations on qualifying virtual asset transfers, crypto.news reported.

Existing operators get 30 days to register

Companies already providing regulated virtual asset services have 180 calendar days from November 5 to apply for the appropriate licence or authorisation, a deadline that falls on May 4, 2027. But the transition carries tighter near-term conditions: existing operators must register with the CBN within 30 days, by December 5, 2026, and begin supervisory reporting within 60 days.

During the transition, operators must comply with anti-money laundering requirements from the commencement date and cannot expand beyond their existing operating scale without the necessary approvals, crypto.news reported. Operators that fail to submit a complete application within the permitted period must stop the regulated activities until they obtain authorisation.

The penalties for operating without authorisation are steep. The framework allows a minimum fine of 100 million naira, about $74,000, plus an additional minimum of 1 million naira for each day the violation continues, crypto.news reported.

The CBN keeps payments, the SEC keeps securities

The regulations draw a firm line with Nigeria's Securities and Exchange Commission. The CBN regulates non-security virtual assets and the payment, settlement, remittance, foreign exchange and custody services built on them, while the SEC continues to regulate securities, investment products and other capital-market activities. Companies operating across both areas must obtain the approvals required by each regulator.

The framework also creates a Systemic Stablecoin designation for tokens that grow large enough to matter to financial stability. A stablecoin qualifies if its naira-equivalent circulating supply exceeds 500 billion naira on each day for 30 consecutive days, or if it is held or used by more than 5 million people in Nigeria, triggering enhanced supervisory requirements.

The framework follows the reserve-backed direction of the US GENIUS Act and the EU's MiCA regime, Stablecoin Insider noted. Nigeria had already moved toward regulated naira stablecoins, with the cNGN ($cNGN) stablecoin project receiving approval for a regulatory sandbox pilot in January 2024, crypto.news reported. In September, Tether ($USDT) announced plans to work with Shiga on self-custodial wallet services for customers across Africa and the Gulf region, and Shiga said its Nigerian Digital Asset Intermediary licence remained subject to final approval.

What to watch next

Three dates will show how the framework lands in practice. The first is December 5, 2026, when existing operators must have registered with the CBN to keep operating during the transition. The second is the start of supervisory reporting within 60 days. The third is May 4, 2027, the deadline for complete licence applications, after which unlicensed operators must stop the regulated activities. Watch also for the first Token Approvals, which will show which stablecoins the CBN is willing to admit, and whether any existing issuer challenges the capital floors or the algorithmic ban.

Sources

• Central Bank of Nigeria, Regulations for the Operations of Non-Security Virtual Assets in Nigeria, November 5, 2026 (primary source: the 169-page framework issued by circular PSP/DIR/PUB/CIR/001/004 and signed by Musa Jimoh, Director, Payments System Policy Department; Section 2.2 prohibits algorithmic stablecoins and four other token categories; Sections 15.1 and 15.2 set minimum paid-up capital of 10 billion naira for Class 1 naira-referenced issuers and 15 billion naira for Class 2 foreign-currency issuers; Section 24 requires full reserve backing plus a 2 percent buffer, daily reconciliation and no minting before reserves are received; Section 54.1 gives existing operators 30 days to register and 180 days to apply for a licence)
• crypto.news, Nigeria's central bank sets ₦15B capital rule for stablecoins, bans algorithmic tokens, November 6, 2026 (secondary reporting: the framework took effect November 5, 2026; Class 1 issuers face a 10 billion naira floor and Class 2 issuers a 15 billion naira floor; other virtual asset providers face a 1 billion naira floor; issuers must hold full reserves plus a 2 percent buffer with daily checks; holders must be able to redeem at par, generally by the next business day; existing operators must register within 30 days and begin supervisory reporting within 60 days; penalties start at a minimum 100 million naira fine plus 1 million naira per day; the IMF warned in June that growing stablecoin use could complicate Nigeria's monetary policy and foreign exchange management; the cNGN stablecoin project received sandbox approval in January 2024; Tether announced plans in September to work with Shiga on self-custodial wallet services across Africa and the Gulf region)
• Crypto Briefing, Nigeria's central bank mandates licenses for stablecoin issuers, November 6, 2026 (secondary reporting: the CBN rolled out the framework on November 5, 2026; algorithmic stablecoins are banned outright; Class 1 issuers need minimum capital of 10 billion naira and Class 2 issuers 15 billion naira; stablecoins must hold at least 100 percent reserves plus a 2 percent buffer; holders must be able to redeem at par, generally by the next business day; existing operators must register within 30 days)
• Blockrora, Nigeria Bans Algorithmic Stablecoins, Licenses Crypto Firms, November 7, 2026 (secondary reporting: the CBN issued the Regulations for the Operations of Non-Security Virtual Assets on Thursday, November 5, 2026, effective immediately, as reported by Cointelegraph; firms already operating have 180 days to apply for a licence; naira-backed issuers face a 10 billion naira capital floor, about $7.4 million, and foreign-currency issuers a 15 billion naira floor, about $11.1 million; at least 40 percent of reserves must be cash or high-quality liquid assets)
• Stablecoin Insider, CBN Stablecoin Capital Rules: N15bn for Dollar Issuers, November 7, 2026 (secondary reporting: the circular is dated November 5, 2026 and numbered PSP/DIR/PUB/CIR/001/004, signed by Musa Jimoh; Class 1 issuers must hold at least 20 percent of the Reserve Pool as a cash deposit with the CBN; the framework aligns with the reserve-backed direction of the GENIUS Act and MiCA)

This article is news reporting and is not investment advice.