Nigeria bans algorithmic stablecoins and sets new licensing rules

Nigeria bans algorithmic stablecoins — Nigeria’s central bank has banned algorithmic stablecoins and introduced new licensing and reserve requirements for crypto companies, expanding its oversight of digital asset payment services in one of Africa’s largest crypto markets.

The Central Bank of Nigeria (CBN) issued its “Regulations for the Operations of Non-Security Virtual Assets” on November 5, 2026. The rules took effect immediately, though existing operators have 180 days to apply for licenses or authorizations.

The regulations prohibit stablecoins that rely primarily on algorithms to maintain value and require issuers to fully back their tokens with reserve assets. Issuers must also maintain an additional buffer equal to at least 2% of their token’s value, with a minimum of 40% of reserves held in cash or highly liquid assets.

Capital requirements are set at 10 billion naira ($7.4 million) for naira-backed stablecoin issuers and 15 billion naira ($11.1 million) for foreign currency-backed issuers. Companies providing crypto payment, exchange, or custody services must maintain minimum paid-up capital of 1 billion naira ($742,000).

The move follows a series of restrictive measures by Nigerian authorities, including previous limits on banking access for exchanges and a high-profile dispute with Binance that led to the exchange discontinuing its naira services in 2024.