Nigeria Tightens Crypto Rules, Bans Algorithmic Stablecoins

Nigeria’s central bank has introduced new licensing and reserve requirements for cryptocurrency companies and prohibited stablecoins that rely mainly on algorithms to maintain their value.

The Central Bank of Nigeria issued its Regulations for the Operations of Non-Security Virtual Assets on Thursday. The rules cover stablecoin issuers, crypto payment providers, exchanges, custodians and other digital asset service providers operating in Nigeria.

The regulations took effect immediately. Existing operators have 180 days to apply for the required licenses or authorizations. The CBN’s stated aims include supporting responsible innovation, protecting consumers and maintaining financial stability.

Stablecoin issuers must fully back their tokens with reserve assets and maintain an additional buffer equal to at least 2% of the tokens’ value. At least 40% of those reserves must be held in cash or other qualifying highly liquid assets. Issuers must also give holders enforceable redemption rights.

The rules require issuers of naira-backed stablecoins to maintain at least 10 billion naira ($7.4 million) in paid-up capital. Issuers of foreign currency-backed stablecoins must hold at least 15 billion naira ($11.1 million). Companies providing crypto payment services, including exchanges and custodians, must maintain at least 1 billion naira ($742,000) in paid-up capital.

The framework prohibits stablecoins whose value depends mainly on algorithms rather than eligible reserve assets. Tokens without enforceable redemption rights are also prohibited.

The regulations follow an executive order signed by President Bola Tinubu in July to coordinate cryptocurrency oversight among Nigerian authorities without changing their existing legal powers. Nigeria has previously restricted banking access for crypto exchanges and sought to limit peer-to-peer trading in naira.

Nigeria’s dispute with Binance, the world’s largest cryptocurrency exchange by trading volume, drew international attention. Binance ended its naira services in March 2024 amid increased 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.

Nigeria’s revenue agency introduced rules for collecting taxes from digital asset platforms and peer-to-peer marketplaces in August 2026.

Reviewed and fact-checked by Alex Panasenko on November 6.