CBN Sets Up to ₦15bn Capital Requirement for Crypto Operators

The Central Bank of Nigeria has set minimum capital requirements of up to ₦15 billion for stablecoin issuers and other crypto operators. The new framework also bans algorithmic stablecoins and interest payments, and gives customers redemption rights.

Under the rules, issuers of naira-backed stablecoins must hold at least ₦10 billion in paid-up capital. Operators offering foreign currency-backed tokens, including dollar-pegged stablecoins, will need ₦15 billion. Other Virtual Asset Service Providers, including digital wallet, payment, transfer and custody businesses, must maintain at least ₦1 billion.

Licensing and SEC overlap

The CBN’s Regulations for the Operations of Non-Security Virtual Assets in Nigeria set licensing, reserve management and consumer protection standards. Individuals and companies cannot issue, exchange, distribute or facilitate regulated virtual assets in Nigeria without CBN authorisation.

Foreign operators targeting Nigerian customers must meet local incorporation and licensing requirements, regardless of approvals in other jurisdictions. Companies already licensed by the Securities and Exchange Commission will face additional capital obligations if they provide services under CBN jurisdiction. Digital assets classified as securities or investment contracts remain under SEC supervision. The CBN may impose higher capital requirements based on an operator’s size, activities and exposure to financial risks.

Reserve and stablecoin rules

Naira-referenced stablecoins must maintain a one-to-one relationship with the local currency. Foreign currency-backed tokens must hold reserves denominated in their reference currencies. Issuers cannot create tokens without first receiving equivalent eligible reserve assets. For naira-backed stablecoins, at least 20% of reserve assets must sit in a designated CBN account. Operators must also maintain an additional 2% reserve overcollateralisation and enough liquid assets to cover six months of operating expenses or an orderly shutdown, whichever is higher. Customer reserves must remain separate from company operating funds.

The framework prohibits algorithmic stablecoins that rely primarily on automated supply adjustments rather than adequate asset backing. Tokens backed mainly by other cryptocurrencies, or lacking enforceable redemption rights, are also banned. Stablecoin issuers cannot pay interest or investment yields to token holders. They cannot market stablecoins as conventional bank deposits or suggest the assets enjoy protection under the Nigeria Deposit Insurance Corporation. Customers must be allowed to redeem eligible stablecoins at their stated value, subject to applicable regulations.

Complaints and systemic oversight

Licensed operators must acknowledge customer complaints within two business days and provide final responses within 20 business days, except where an extension is agreed in writing. Peer-to-peer cryptocurrency platforms will require regulatory approval and must implement customer identification, transaction monitoring and anti-money laundering controls.

The CBN will impose enhanced supervision on stablecoins considered capable of threatening financial stability. A stablecoin may be classified as systemically important if its circulating value exceeds ₦500 billion for 30 consecutive days or its Nigerian user base surpasses five million. Transaction volumes and market concentration may also influence the classification.

For Nigerian crypto businesses, the capital and reserve rules raise the entry bar and could push smaller operators into partnerships or out of the market. For users, the complaint deadlines and redemption rights offer clearer consumer protection. The CBN says the measures aim to balance financial innovation with consumer protection and monetary stability.