Nigeria Requires 20% of Stablecoin Reserves to Be Deposited With Central Bank
Key Facts
The Central Bank of Nigeria has required issuers of naira-linked stablecoins to deposit at least 20% of their total reserve pool in an account with the bank, with the threshold calculated daily, under rules issued by the bank on November 5, 2026, and effective the same day. The requirement applies to Category I issuers, which include naira-referenced stablecoins, while the rules classify foreign currency-referenced stablecoins as Category II. The bank may impose a deposit ratio above the minimum. The rules give the bank immediate electronic access to the account balance and allow it to request transaction data at any time. The provisions place a specified portion of a Category I issuer’s reserves in an account subject to direct regulatory monitoring.
The deposit account does not earn interest, and the rules specify that its balance may be used in the event of an issuer’s insolvency solely to meet redemption requests due to holders. Those requests also take priority over other claims, according to the rules. The bank requires its prior written consent for ordinary withdrawals from the account. The rules also allow for instructions issued by a special administrator, as well as withdrawals approved in writing in cases of stress. The rules thus set out withdrawal and redemption procedures while keeping access to the balance under the bank’s supervision.
The central bank deposit is in addition to a separate liquidity threshold: issuers must hold at least 40% of the reserve pool in cash or eligible highly liquid assets. The rules explicitly state that the central bank deposit does not count toward this ratio. Issuers must therefore meet both thresholds, rather than treat the deposit as a substitute for cash or liquid assets. The rules also require an additional collateral buffer of at least 2% of the nominal value of circulating tokens. This buffer is allocated to absorb valuation losses on reserve assets and accumulated operating liabilities, and may be released only with the bank’s prior approval.
The rules require daily reconciliation of the number and total value of stablecoins in circulation against the value and composition of the reserve pool. The reconciliation must be completed at the end of each business day. This procedure requires issuers to regularly compare their outstanding liabilities to token holders with their reserve assets. The rules cover activities directed at people in Nigeria or that may materially affect the payment system or foreign exchange market. The provisions may apply even when the entity concerned has no physical presence in the country.
Requirements vary by currency reference: the fixed local deposit with the central bank applies to Category I issuers linked to the naira. Stablecoins linked to foreign currencies are subject to separate provisions covering disclosure of the reference currency, a cash and highly liquid assets threshold, custody arrangements, asset concentration and operational liquidity. The rules require foreign currency-referenced stablecoins available in Nigeria to be issued through a locally incorporated entity holding a Category II license and token approval. They also prohibit algorithmic stablecoins that rely mainly on adjusting supply or demand rather than being fully backed by eligible reserve assets. This classification determines which requirements apply to each category of issuer.
The rules link licensing to different capital requirements: a Category I issuer must maintain paid-up capital of 10 billion naira, compared with a minimum of 15 billion naira for a Category II issuer. Every licensed issuer must also prepare and publish a stablecoin information document before issuance. The document is subject to the bank’s review and approval as part of the licensing process. These provisions require issuers to present information about the token before launch, alongside meeting capital, liquidity and reserve requirements. The information provided does not specify a separate later date for these procedures to begin, as the rules took effect on November 5, 2026.
The rules come as crypto assets are widely used in Nigeria. The International Monetary Fund said the country received about $59 billion in crypto asset flows between July 2023 and June 2024, ranking second globally in the 2024 crypto adoption index and sixth in the 2025 edition. The fund said Nigeria accounted for about 60% of stablecoin flows into Sub-Saharan Africa since 2019. The fund sees stablecoins as potentially enabling faster, lower-cost cross-border transfers, but warned that the spread of dollar-denominated tokens could deepen currency substitution and weaken monetary policy effectiveness. It also said the central bank’s restriction on banks’ services to crypto trading platforms in February 2021 pushed activity toward less regulated channels, particularly peer-to-peer trading.
The IMF says the cost of sending $200 to Sub-Saharan Africa is about 9% of the transaction value, compared with a global average of 6%, helping explain the appeal of lower-cost stablecoin transfers. At the same time, the fund warned that widespread use of dollar-denominated stablecoins could increase capital flow volatility, deepen currency substitution and weaken monetary policy transmission. The fund identified clarifying the regulatory treatment of stablecoin issuers and improving data on transfers between the naira and stablecoins among the next steps. It also called for faster, lower-cost and more interconnected cross-border payments. The rules do not give an additional date for implementing the steps cited by the fund.