Nigeria bans algorithmic stablecoins and sets new crypto licensing rules
Nigeria bans algorithmic stablecoins under new central bank rules
Nigeria has banned algorithmic stablecoins and introduced new licensing and reserve requirements for cryptocurrency companies.
A stablecoin is a type of crypto token designed to keep a steady value, often linked to a currency such as the naira or the US dollar. The Central Bank of Nigeria (CBN) issued the Regulations for the Operations of Non-Immediate Virtual Assets on Thursday. The rules cover stablecoin issuers, crypto payment providers, exchanges, custodians and other covered service providers.
The regulations took effect immediately. The CBN said the framework aims to support responsible innovation while protecting consumers and financial stability.
Main requirements at a glance
- Stablecoins that rely mainly on algorithms, rather than eligible reserves, to maintain their value are prohibited, along with tokens that lack enforceable redemption rights.
- Stablecoin issuers must fully back their tokens with reserve assets and hold an additional buffer of at least 2% of their value.
- At least 40% of reserves must consist of cash or qualifying highly liquid assets.
- Minimum paid-up capital is 10 billion naira ($7.4 million) for naira-backed issuers and 15 billion naira ($11.1 million) for foreign currency-backed issuers.
- Companies providing payment-related crypto services, including exchange and custody services, must have minimum paid-up capital of 1 billion naira ($742,000).
Coordination with other authorities
The move follows President Bola Tinubu's July executive order. That order sought to coordinate crypto oversight among Nigerian authorities without changing their existing powers.
Earlier restrictions and recent tax rules
Nigeria has previously taken a restrictive approach to crypto trading. It previously limited banking access for exchanges and sought to restrict peer-to-peer trading using local currency.
The country also disputed with Binance, described in the source as the world's largest cryptocurrency exchange by trading volume. Binance discontinued its Nigerian naira services in March 2024 amid government scrutiny of crypto trading and allegations of currency manipulation. Nigerian authorities detained Binance executive Tigran Gambaryan for nearly eight months before dropping money laundering charges against him in October 2024.
More recently, Nigeria's revenue agency introduced crypto tax collection rules for digital asset platforms and peer-to-peer marketplaces in August 2026.
180 days to apply for licences
Existing operators have 180 days to apply for licences or authorizations under the new framework.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.