The Central Bank of Nigeria (CBN) has mandated a minimum paid-up capital of N15 billion for companies seeking to issue foreign-currency-referenced stablecoins in Nigeria.
The CBN issued the capital requirement directive in its ‘Regulations for the Operations of Non-Security Virtual Assets in Nigeria’, referenced in a circular to virtual assets service providers dated November 5.
The new policy, which took effect on November 5, established licensing and supervisory rules for stablecoin issuers and other non-security virtual asset service providers in Nigeria.
The CBN classified stablecoins into two categories under the regulations: Class 1 for tokens referencing the naira and Class 2 for those referencing currencies other than the naira.
The apex bank said Class 2 stablecoins could be used for cross-border payments and remittances, international commerce and trade settlement, subject to regulatory requirements.
The regulation set the minimum paid-up capital for Class 2 licensed issuers at N15 billion, or any higher amount the CBN might prescribe.
“A Class 2 Licensed Issuer shall maintain minimum paid-up capital of fifteen billion Naira (N15,000,000,000), or such higher amount as the Bank may prescribe, on entry and at all times thereafter,” the regulation states.
For issuers of naira-referenced stablecoins, the CBN set a minimum paid-up capital of N10 billion, subject to any higher amount prescribed by the bank.
The regulations require foreign-currency-referenced stablecoins to be issued through a Nigerian-incorporated entity holding a valid Class 2 licence from the CBN.
“A Class 2 Stablecoin shall be issued only by a Nigerian-incorporated entity holding a valid Foreign Currency Issuer Licence (Class 2) granted by the Bank,” the regulation states.
The CBN also prohibited foreign-currency-referenced stablecoins from being offered, distributed, marketed, exchanged, held in custody or redeemed in Nigeria unless they have been approved by the bank and issued through a licensed Class 2 entity.
Under the new rules, Nigerian issuers are allowed to be affiliated with, controlled by or associated with foreign issuers or groups, but the locally incorporated entity is responsible for regulatory compliance.
“There is no offshore issuer exemption from incorporation, licensing or capital,” the regulation states.
The CBN also required issuers to maintain their paid-up capital separately from their reserves, reserve deposits with the apex bank, customer funds, and operational liquidity.
“Capital shall be separate from and additional to issuer reserves, the CBN reserve deposit, customer funds and assets and operational liquidity. No amount shall be counted simultaneously towards these separate requirements,” the regulation states.
The CBN emphasised that it reserves the right to prescribe capital above the minimum based on an issuer’s scale of operations, transaction volumes, risk profile, redemption obligations, and technological risks.
The regulations asked issuers that fall below their capital thresholds to notify the CBN immediately and submit a capital restoration plan within 10 business days.
The bank said it could restrict new issuance, customer onboarding or other activities until an issuer restores its capital, and could take further supervisory action.
OTHER VIRTUAL ASSET REQUIREMENTS
The regulator also mandated stablecoin issuers to maintain reserve, liquidity, redemption, governance, cybersecurity and anti-money laundering controls.
For Class 2 stablecoins, the CBN said it could impose restrictions, transaction caps, circulation thresholds and customer eligibility conditions where necessary to address risks to monetary policy, financial stability, payment-system integrity, consumer protection or foreign-exchange management.
The apex bank also set a minimum paid-up capital of N1 billion for providers of other non-security virtual asset services, including custody, wallet, exchange, transfer, and remittance services.
The regulations further stated that the N1 billion requirement would be in addition to any capital that providers are required to maintain under an existing Securities and Exchange Commission (SEC) licence.
Under Section 54.1, the CBN gave existing operators 30 days from the commencement of the regulations to register with the bank, 60 days to begin submitting supervisory reports and 180 days to complete their licence applications.
The regulations allowed operators to continue providing services during the transition period only at their existing scale and subject to conditions imposed by the apex bank.
The CBN warned that operators who fail to submit their applications within the prescribed period would have to cease operations until they obtain the required licence or authorisation.
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