CBN Sets ₦15bn Capital Requirement for Dollar-Backed Stablecoins, ₦10bn for Naira Operators
- CBN sets minimum capital requirements of up to ₦15 billion for stablecoin issuers and other crypto operators
- New rules require stablecoin reserves, ban algorithmic tokens and interest payments, and guarantee customers' redemption rights
- Licensed operators must meet complaint deadlines, while large stablecoins face enhanced supervision for potential financial risks
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Central Bank of Nigeria (CBN) has unveiled tougher regulations for cryptocurrency and stablecoin operators, introducing minimum capital requirements of up to ₦15 billion as it strengthens oversight of Nigeria's rapidly expanding digital asset market.
Under the new framework, issuers of naira-backed stablecoins must maintain at least ₦10 billion in paid-up capital, while operators offering foreign currency-backed tokens, including dollar-pegged stablecoins, will require ₦15 billion.
Source: Getty Images
Other Virtual Asset Service Providers (VASPs), including digital wallet, payment, transfer and custody businesses, must maintain a minimum capital of ₦1 billion.
The CBN's Regulations for the Operations of Non-Security Virtual Assets in Nigeria set out these requirements and establish licensing, reserve management, and consumer protection standards.
CBN introduces tougher cryptocurrency licensing rules
The regulations prohibit individuals and companies from issuing, exchanging, distributing or facilitating regulated virtual assets in Nigeria without appropriate CBN authorisation.
Foreign operators targeting Nigerian customers must also comply with local incorporation and licensing requirements, regardless of approvals obtained in other jurisdictions.
Companies already licensed by the Securities and Exchange Commission (SEC) will face additional capital obligations if they provide services falling under the CBN's jurisdiction.
However, digital assets classified as securities or investment contracts will remain under SEC supervision.
The CBN may impose higher capital requirements on operators depending on their size, activities and exposure to financial risks.
Stablecoin issuers face strict reserve requirements
Beyond capital requirements, the CBN is introducing safeguards designed to ensure stablecoins remain backed by sufficient assets.
Naira-referenced stablecoins must maintain a one-to-one relationship with the local currency, while 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 be deposited in a designated CBN account.
Operators must also maintain an additional 2% in reserve overcollateralisation and sufficient liquid assets to cover six months of operating expenses or an orderly shutdown, whichever is higher.
Customer reserves must remain separate from companies' operational funds, Daily Sun reported.
CBN bans algorithmic stablecoins and interest payments
The framework prohibits algorithmic stablecoins that rely primarily on automated supply adjustments rather than adequate asset backing to maintain their value.
Tokens backed mainly by other cryptocurrencies, or lacking enforceable redemption rights, are also prohibited.
Stablecoin issuers cannot pay interest or investment yields to token holders.
They are equally barred from marketing stablecoins as conventional bank deposits or suggesting that 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.
Crypto customers receive stronger consumer protections
The CBN has introduced mandatory complaint-resolution timelines for licensed operators.
Companies 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 also require regulatory approval and must implement customer identification, transaction monitoring and anti-money laundering controls.
Source: Twitter
CBN identifies stablecoins posing systemic risks
The apex bank 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.
The measures signal tighter scrutiny of Nigeria's digital asset industry as regulators seek to balance financial innovation with consumer protection and monetary stability.
Binance begins recovery of stolen crypto
Legit.ng earlier reported that cryptocurrency exchange Binance has announced fresh progress in its efforts to recover assets affected by a major security incident, revealing that it has earmarked more than $6.34 billion of company funds to compensate affected users.
The exchange disclosed that approximately $3 billion in assets had already been frozen with assistance from industry partners, raising hopes that a substantial portion of the affected funds could eventually be recovered.
Source: Legit.ng
