Nigeria's central bank bans algorithmic stablecoins and sets a 10 billion naira capital floor for naira-backed issuers in a new licensing regime

Nigeria's central bank has issued a licensing regime for stablecoin issuers and other virtual asset providers that deal outside the securities markets, The Block reports. Cointelegraph names the document "Regulations for the Operations of Non-Security Virtual Assets." The rules took effect on November 5 and bar algorithmic stablecoins, defined as tokens that rely mainly on market dynamics rather than eligible reserves to hold their value.

Cointelegraph and crypto.news report minimum paid-up capital of 10 billion naira, about $7.4 million, for issuers of naira-backed stablecoins, 15 billion naira, about $11.1 million, for issuers backed by foreign currency, and 1 billion naira for other providers. Issuers must hold full reserves plus a buffer of at least 2%, and each token needs the bank's written approval before it is offered. Foreign-currency stablecoins may be offered to Nigerians only through a Nigerian-incorporated entity with the right licence.

Existing operators have 180 days to apply. The Block says the rules reach operators with no physical presence in Nigeria if their activity affects the country's payments system, and that firms active in both payments and securities need approval from the central bank and the Securities and Exchange Commission. crypto.news reports a minimum fine of 100 million naira for unauthorised activity.