A broad rulebook for payment-focused tokens

Nigeria's central bank has published a comprehensive framework for stablecoins, deposit money tokens and non-security virtual-asset services, replacing a patchwork of expectations with formal licensing, capital and operating rules. The Central Bank of Nigeria document covers issuance, exchange, custody, wallets, transfers, payment gateways, remittances, clearing and settlement when those activities are conducted in Nigeria, directed at Nigerian users or materially affect the country's financial system. It leaves tokenized securities and capital-market activity under the Securities and Exchange Commission.

Two stablecoin classes, plus token approval

The framework divides stablecoins into Class 1 tokens referenced one-to-one to the naira and Class 2 tokens referenced to foreign currencies. A licence alone is not enough: issuers must obtain written approval for each token, including its reference currency, reserve arrangements, name, ticker and supported blockchain networks. Foreign-currency stablecoins offered to Nigerians must be issued through a Nigerian-incorporated entity holding a Class 2 licence. That requirement reaches offshore groups even when they have no physical presence in the country.

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Capital and reserves set a high entry bar

A Class 1 issuer must maintain at least ₦10 billion in paid-up capital, while a Class 2 issuer needs ₦15 billion. Providers of other covered services, including certain exchanges, wallets and payment firms, face a ₦1 billion minimum in addition to any capital required by the SEC. Licensed stablecoin issuers must hold eligible reserves received before minting and maintain at least 2% overcollateralization above par value. Naira-stablecoin issuers must also keep at least 20% of their reserve pool as cash in a dedicated account at the CBN, while at least 40% of the broader reserve pool must be cash or qualifying high-quality liquid assets.

Redemption and prohibited designs

The rules give holders a right to redeem at par no later than the end of the next business day after a valid request, subject to tightly defined stress provisions. Standard redemption cannot carry a fee. Algorithmic stablecoins that rely primarily on supply or demand adjustments rather than eligible reserve assets are prohibited, as are certain crypto-collateralized structures. Issuers and service providers must also apply customer due diligence, sanctions screening, transaction monitoring and Travel Rule controls. These obligations matter for exchanges, peer-to-peer platforms, custodians and remittance providers as much as for token issuers.

Transition timing needs careful reading

The CBN rulebook says existing operators have 180 calendar days from commencement to apply for the appropriate licence and must register with the bank within 30 days. Independent reporting says the regulations took effect on November 5. However, the official text also says the commencement date is to be specified in the issuing instrument, which is not reproduced inside the 169-page rulebook. Operators should therefore confirm the circular and any implementation notices before calculating deadlines. During the transition, businesses may continue only at their existing scale and under interim conditions.

What changes for the market

The framework gives Nigeria a detailed operating model for payment-focused digital assets rather than a blanket prohibition. For issuers, the immediate challenge is the cost of local incorporation, regulatory capital, reserve custody and continuous compliance. For users, the intended safeguards include verifiable backing, next-day redemption and clearer responsibility when a provider fails. The next evidence to watch will be the CBN's commencement notice, application procedures, register of approved firms and the first token approvals. Until those appear, publication of the rules establishes the pathway but does not mean any existing stablecoin or provider has automatically received authorization.

Sources

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