CBN Sets N10bn Capital for Naira Stablecoin Issuers, N15bn for Dollar-Backed Operators

The Central Bank of Nigeria has fixed N10 billion as capital requirement for naira stablecoin issuers and N15 billion for dollar-backed operators. The rule sits in a new framework titled Regulations for the Operations of Non-Security Virtual Assets in Nigeria. The framework creates a risk-based system for stablecoins, Deposit Money Tokens and other digital tokens designed mainly for payments, settlement and transfer of value.

Virtual assets classified as securities, investment contracts and other capital market products will remain under the regulatory jurisdiction of the Securities and Exchange Commission.

Naira backing and token classes

Stablecoins must maintain a one-to-one relationship with the naira and be fully backed by eligible naira-denominated reserve assets. Class 2 stablecoins must reference currencies other than the naira and comply with applicable foreign exchange, reserve, liquidity and redemption requirements.

The CBN also listed prohibited tokens. These include tokens backed mainly by other virtual assets, tokens issued by sanctioned persons or entities in sanctioned jurisdictions, and instruments marketed as stablecoins without giving holders an enforceable right to redeem them at their stated value.

Local company and licensing rules

Stablecoin issuers must establish locally incorporated companies and obtain the appropriate CBN licences before operating in Nigeria. For companies already licensed by the SEC, the N1 billion requirement for non-security virtual asset services will be additional to their existing SEC capital obligations.

Financial institutions seeking to offer virtual asset payment services must also obtain CBN approval and provide the additional capital required. Before commencing issuance, operators must publish approved white papers explaining their products, reserve arrangements, redemption procedures, risks, governance structures and regulatory status.

Peer-to-peer virtual asset platforms will also require CBN approval. They must identify and verify customers, monitor transactions and prevent the use of third-party, fictitious or improperly attributed accounts and wallets.

Systemic designation threshold

A stablecoin may be designated as systemic if its naira-equivalent circulating supply exceeds N500 billion daily for 30 consecutive days or if more than five million people in Nigeria hold or use it.

The framework raises entry and compliance costs for stablecoin and P2P operators. It also gives the CBN closer oversight of naira-backed payment tokens and the reserves behind them.