CBN INTRODUCES N15BN CAPITAL THRESHOLD FOR FOREIGN CURRENCY STABLECOINS
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By: Hammad Fasasi
The Central Bank of Nigeria (CBN) has introduced a minimum paid-up capital requirement of N15bn for companies issuing foreign currency-backed stablecoins, including digital tokens pegged to the United States dollar.
The new requirement forms part of regulations governing non-security virtual assets and digital payment services in Nigeria, released by the apex bank on Friday following a circular dated November 5, 2026.
The circular was signed by the Director of the Payments System Policy Department, Musa Jimoh.
Under Section 15.2 of the regulations, the CBN stated that Class 2 licensed issuers must maintain a minimum paid-up capital of N15bn at the point of entry and throughout their operations, or any higher amount the bank may prescribe.
The provision covers Class 2 stablecoins, which are digital tokens designed to maintain a stable value against foreign currencies, particularly the US dollar.
The regulations also establish a N10bn minimum capital requirement for issuers of naira-backed stablecoins, classified as Class 1, while companies providing other non-security virtual asset services are required to maintain at least N1bn in paid-up capital.
According to the CBN, Class 1 licensed issuers must maintain the N10bn minimum capital requirement at all times, or any higher amount prescribed by the regulator.
For other virtual asset service providers, the N1bn requirement must be maintained separately from capital committed to licences issued by the Securities and Exchange Commission (SEC) or other regulatory authorities.
The framework establishes different capital thresholds for stablecoin issuers and other virtual asset operators, taking into account the varying financial and operational risks associated with their activities.
It also authorises the CBN to impose higher capital requirements based on operators’ transaction volumes, market significance, redemption obligations, technology risks and exposure to the wider financial system.
The regulations specify that capital must remain separate from issuer reserves, mandatory deposits with the CBN, customer funds and operational liquidity.
This means operators cannot use the same funds to meet multiple regulatory obligations, including capital adequacy requirements and reserves backing stablecoins already in circulation.
The CBN further requires eligible capital to be held in cash in designated accounts with the apex bank or in approved Federal Government securities under its control.
Operators whose capital falls below the prescribed minimum are required to notify the regulator immediately and submit a capital restoration plan within 10 business days.
The CBN may also restrict new token issuance or customer onboarding until the affected operator meets the required capital threshold.
Beyond capital requirements, the new framework introduces strict rules on assets backing stablecoins, directing issuers to maintain reserves equivalent to at least 100 per cent of their outstanding obligations, alongside an additional two per cent buffer against potential losses.
The regulations prohibit issuers from creating new stablecoin tokens unless equivalent eligible reserve assets have been received and secured in the designated reserve pool.
Stablecoin holders must also be allowed to redeem their tokens at face value, generally by the next business day after submitting a valid request. Standard redemption transactions must not attract charges.
The CBN also prohibited algorithmic stablecoins that depend mainly on supply adjustments rather than adequate reserve assets to maintain their value. Tokens linked to fiat currencies but backed primarily by other cryptocurrencies are also banned under the framework.
In addition, the regulator introduced enhanced supervisory requirements for stablecoins whose circulating value exceeds N500bn for 30 consecutive days or whose usage reaches more than five million people in Nigeria.
Such digital assets will be classified as systemically important and subjected to stricter regulatory oversight.
The framework also covers cryptocurrency exchanges, digital wallets, payment gateways, remittance services, custody providers and platform-facilitated peer-to-peer transactions.
It imposes obligations on operators relating to anti-money laundering, counter-terrorism financing, customer identification, transaction monitoring, cybersecurity, consumer protection and regulatory reporting.
The rules apply to both local and foreign operators providing regulated services to Nigerians, irrespective of whether they maintain a physical office in the country.
However, the CBN clarified that virtual assets classified as securities would remain under the regulatory authority of the SEC, with both institutions expected to collaborate in areas where their responsibilities overlap.
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