Nigeria Sets New Local Licensing Rules For Dollar Stablecoins

The Central Bank of Nigeria has established new regulations requiring dollar-pegged stablecoins offered to retail customers to be issued by locally incorporated and licensed entities. Taking effect on November 5, 2026, the framework includes a conditional 180-day application transition period for existing operators. Foreign-currency stablecoins are classified under the new rules as Class 2 assets, requiring a Nigerian-incorporated entity holding a specific foreign currency issuer license alongside formal approval of the token itself. A foreign license, regulatory status, or agreement with a local intermediary cannot substitute for these requirements.

The regulatory reach extends to regulated activities directed at individuals in Nigeria even if the provider lacks a physical presence in the country. Issuers and service providers face distinct authorization requirements, and non-issuance service authorizations do not permit stablecoin issuance. Furthermore, issuer applicants must establish a staffed Nigerian office and effective local management, including a resident chief compliance officer, prior to final licensing. The framework makes a narrow exception under Section 11.10.17, allowing the central bank to recognize a foreign-issued stablecoin solely for expressly approved wholesale cross-border settlement, though this path excludes retail offerings.

Local incorporation and token approval are now mandatory for retail dollar stablecoins in Nigeria.

Class 2 token approval does not automatically authorize settling, pricing, or discharging domestic obligations denominated in naira unless permitted by applicable law. While the regulations preserve the statutory jurisdiction of the Securities and Exchange Commission, an existing principal license does not remove the necessity for express central bank approval regarding non-security virtual asset services.

Existing operators have 180 calendar days from commencement to submit complete applications for the appropriate licenses. During this assessment period, continued access for foreign-currency stablecoin arrangements requires express interim permission from the central bank, and submitting an application alone does not establish permission to keep serving the market. Operators must also complete registration within 30 days and comply with anti-money laundering and counter-terrorist financing rules from commencement. Those who miss the application deadline must cease operations until obtaining the required authorization.

Why it matters

The new regulatory framework significantly alters how digital asset service providers operate within Nigeria by closing loopholes that previously allowed foreign entities to serve retail customers without local incorporation. Affected operators must navigate strict compliance and transitional timelines, or risk having to halt their services entirely in the region.