The Central Bank of Nigeria has introduced mandatory licensing for stablecoin issuers, separating naira-referenced tokens from those referencing foreign currencies and requiring approval for each token before issuance. CoinMarketCap reported the requirements on November 7, following regulations that took effect on November 5, 2026.
The framework covers businesses operating in Nigeria, targeting Nigerian users, or affecting the country's payments and foreign-exchange systems, including operators without a physical presence. It also covers non-security virtual asset services beyond issuance. The Block's report confirms that securities and capital-market activities remain under the Securities and Exchange Commission.
For issuers, the immediate commercial question is whether they can meet the local operating requirements. For exchanges and wallets, access to a token now depends on approvals covering both the issuer and the token itself.
Foreign licenses cannot replace Nigerian approval
Naira-referenced issuers fall under Class 1. Foreign-currency-referenced issuers fall under Class 2, which requires a Nigerian-incorporated entity holding the corresponding CBN license.
Neither an offshore license or registration nor an arrangement with a Nigerian intermediary can substitute for Nigerian authorization. A foreign group seeking access therefore faces a decision about establishing and funding a locally regulated issuer, rather than relying entirely on its existing overseas structure.
The restriction extends to distribution. Licensed businesses cannot make an unapproved stablecoin available to Nigerian users, according to Unchained's coverage. This brings exchanges and custodial wallets into the compliance process even when they do not create the tokens they handle.
An exchange's own authorization cannot resolve an issuer's missing approval. Distribution plans must account for this dependency between the two businesses.
Capital floors sit above token reserves
The financial entry requirements differ by activity. Class 1 issuers must maintain at least 10 billion naira in paid-up capital. Class 2 issuers face a 15 billion-naira minimum. Other non-security virtual asset service providers must maintain at least 1 billion naira, separately from capital committed under other regulatory licenses.
These are continuing requirements. Capital must also remain separate from issuer reserves, customer assets and operational liquidity, according to Punch's report.
That separation determines the funding burden. An issuer cannot count the assets backing circulating tokens toward its paid-up capital floor. Its shareholders must finance the regulated business while reserves remain available to meet token obligations.
Punch also reports that stablecoins require full reserve backing plus an additional 2% buffer. Standard redemptions must be available at face value, generally by the next business day after a valid request, without standard redemption charges.
For users evaluating stablecoin payment options, redemption terms deserve attention alongside the token's reference currency. A stable price target and a contractual route back to the underlying currency address different parts of the user's exposure.
Token approval carries limits on payment use
The CBN's rules prohibit algorithmic stablecoins, fiat-referenced tokens backed wholly or primarily by other virtual assets, and tokens without an enforceable right to redemption at par.
Class 1 tokens must reference the naira one-to-one and use eligible naira-denominated backing. Class 2 tokens can support activities including cross-border payments, remittances and international trade settlement, subject to applicable requirements.
Approval of a foreign-currency token does not automatically permit its use to settle a domestic obligation denominated in naira. Lending and borrowing also require separate approval. These restrictions appear in the CBN's published regulations.
A business planning to combine token issuance, domestic merchant payments and lending must therefore design its product around the permissions for each activity. Receiving an issuer license alone leaves those additional approvals unresolved.
The regulations also prohibit presenting a license as a central-bank guarantee or describing Class 1 and Class 2 stablecoins as deposits covered by Nigerian deposit insurance.
Existing operators face a conditional transition
Existing operators have 180 calendar days from commencement to apply for the appropriate license or authorization. Continued operation during that period is subject to conditions, including registration within 30 days and supervisory reporting within 60 days, unless an earlier reporting deadline is prescribed.
Operations are limited to their existing scale and subject to the CBN's interim conditions. Existing Class 2 arrangements need express interim permission to maintain access while under assessment.
This gives incumbent businesses time to submit applications while constraining expansion during the transition. The application window should not be read as blanket permission to launch additional services.
Overview
Nigeria has established separate licensing routes for naira and foreign-currency stablecoin issuers, with local incorporation, capital requirements and individual token approvals. The framework also places obligations on businesses distributing and handling those tokens.
In practice, Nigerian market access depends on the issuer's structure, the token's approval and the permissions attached to the service. Existing operators have 180 days to apply, with earlier registration and reporting requirements.
