Nigeria Enforces Local Issuance Mandate for Dollar-Stablecoins Targeting Retail Clients

New Regulations for Dollar-Pegged Stablecoins in Nigeria

The Central Bank of Nigeria (CBN) has introduced new regulations requiring all dollar-pegged stablecoins aimed at retail customers to be issued by firms that are licensed and incorporated within Nigeria. This policy officially came into effect on November 5, 2026, allowing a 180-day period for current service providers to adapt and apply for compliance.

Requirements for Foreign Currency Stablecoins

Under these rules, foreign currency stablecoins, categorized as Class 2, must be approved by the CBN, necessitating local incorporation to continue operations in Nigeria. Entities outside Nigeria cannot rely on a foreign license, regulatory agreements, or partnerships with local intermediaries to meet these requirements.

The regulations extend to any activities directed towards Nigerian residents, regardless of whether the provider has a physical presence in the country. Importantly, service providers and issuers face different sets of approval standards; there is no allowance for the issuance of stablecoins under non-issuance service licenses.

Local Office and Management Requirements

Issuers must establish a dedicated Nigerian office with a fully staffed local management team, including a chief compliance officer residing in Nigeria before full licensing is granted.

Exceptions and Restrictions

An exception to local issuance can be found in Section 11.10.17, which permits the CBN to recognize foreign-issued stablecoins, but only for specifically authorized wholesale cross-border transactions—not for retail customers.

Furthermore, even with Class 2 Token Approval, issuers are restricted from using stablecoins for settling or pricing local naira obligations unless permitted by relevant foreign-exchange laws.

Jurisdiction and Licensing Compliance

These regulations also affirm that the Securities and Exchange Commission's jurisdiction remains intact; thus, other licenses do not exempt providers from obtaining specific CBN approval for virtual asset services that do not classify as securities. Operators currently active in the market are allotted a 180-calendar day period to file for the necessary licenses while remaining under the CBN’s transitional conditions, which include prompt registration and subsequent reporting obligations.

Compliance Measures

In terms of compliance measures, the new rules impose stringent anti-money laundering and counter-terrorism financing protocols effective from the start date. The CBN will evaluate the compliance status of existing Class 2 arrangements and issuers throughout this transition period, and operators who fail to meet the licensing requirements may have to discontinue their services until they secure the proper authorizations.

This regulatory framework illustrates the CBN's commitment to localizing the stablecoin ecosystem while ensuring financial integrity and security in Nigeria.