Nigeria’s CBN Sets New Stablecoin Rules

The Central Bank of Nigeria’s new rules for virtual assets took effect on November 5, setting licensing and capital requirements for stablecoin issuers and other nonsecurity virtual-asset businesses. The framework also prohibits algorithmic stablecoins and certain fiat-referenced tokens backed mainly by cryptocurrencies. Issuers of stablecoins tied to foreign currencies, including the U.S. dollar, must maintain at least ₦15 billion in paid-up capital. Issuers of naira-referenced stablecoins must maintain at least ₦10 billion. Other regulated virtual-asset service providers face a minimum capital requirement of ₦1 billion, according to the regulation. The rules establish a licensing framework covering stablecoin issuers, exchanges, custody providers, payment and remittance services, and platforms facilitating peer-to-peer transactions. They apply to regulated activities conducted in or from Nigeria, directed at Nigerians, or capable of materially affecting the country’s payment or financial system, foreign-exchange market or broader economy. Licensed stablecoin issuers must hold reserves covering their outstanding obligations and maintain an additional buffer equal to at least...