Nigeria's New Stablecoin Rules Could Force Tether and Circle to Secure Local Licenses and ₦15 Billion Capital
Nigeria's Central Bank has introduced new stablecoin regulations that could require major issuers Tether and Circle to establish locally incorporated entities, obtain regulatory licenses, and maintain at least ₦15 billion in paid-up capital. The framework introduces stricter requirements for foreign currency-backed stablecoins, including USDT and USDC, as authorities tighten oversight of digital asset activities.
According to The Central Bank of Nigeria (CBN) outlined the requirements in its Regulations for the Operations of Non-Security Virtual Assets in Nigeria. The rules establish licensing, financial, and operational obligations for companies issuing or facilitating stablecoin services in the country.
Although the framework does not prohibit USDT or USDC, it could change how these assets are issued, distributed, exchanged, and accessed by Nigerian cryptocurrency users.
Tether and Circle Face ₦15 Billion Stablecoin Capital Requirement
The CBN framework divides stablecoins into two categories according to their reference currencies. Class 1 covers naira-referenced stablecoins, while Class 2 applies to foreign currency-backed assets, including Tether's USDT and Circle's USDC.
Under the new requirements, foreign currency stablecoins can only be offered, marketed, distributed, exchanged, held in custody, or redeemed for Nigerian customers through locally incorporated entities holding a valid Class 2 Foreign Currency Issuer Licence.
The regulation states: “A foreign-currency-referenced stablecoin may be offered, marketed, distributed, exchanged, held in custody, redeemed or otherwise made available to persons in Nigeria only as a Class 2 Stablecoin issued through a Nigerian-incorporated entity holding a Foreign Currency Issuer Licence (Class 2).”
This means Tether and Circle could need to establish licensed Nigerian subsidiaries or enter appropriate local arrangements to provide regulated stablecoin services. Foreign ownership is permitted, but Nigerian entities must maintain compliance systems and provide regulators with relevant operational records.
Class 2 stablecoin issuers must maintain at least ₦15 billion in paid-up capital. By comparison, issuers of naira-backed stablecoins face a minimum requirement of ₦10 billion, while other regulated virtual asset service providers must maintain at least ₦1 billion under applicable licensing categories.
These capital requirements could increase the cost of obtaining regulatory approval, particularly for smaller cryptocurrency businesses operating in Nigeria.
Nigeria Tightens Rules for Peer-to-Peer Crypto Trading
The new framework also introduces additional controls for cryptocurrency platforms facilitating peer-to-peer transactions. Businesses providing order matching, escrow services, or payment settlement must obtain the appropriate authorization and explicit approval from the CBN.
The regulation states: “The Bank has expressly approved Platform-Facilitated Peer-to-Peer Services within the scope of that licence, authorisation or approval.”
The requirements target organized trading platforms and intermediaries rather than private bilateral transactions conducted without third-party services.
Foreign currency stablecoin conversions into naira also face additional restrictions and require specific regulatory approval. These provisions could affect platforms that facilitate USDT and USDC trading against the Nigerian currency.
CBN Requires Full Stablecoin Reserves and Smart Contract Controls
Beyond licensing and capital requirements, the CBN has introduced reserve obligations intended to ensure that regulated stablecoin issuers maintain sufficient assets to cover their outstanding token liabilities.
Licensed issuers must hold reserves equivalent to at least 100% of their outstanding stablecoin obligations. For naira-backed stablecoins, issuers must also maintain at least 20% of their total reserve pool as a cash deposit with the central bank in a dedicated account.
The regulation specifies: “Every Class 1 Licensed Issuer shall maintain not less than twenty per cent (20%) of its total Reserve Pool as a cash deposit at the Bank in a dedicated Reserve Deposit Account.”
The framework also requires issuers to implement smart contract controls capable of freezing transactions, blocking addresses, and burning tokens. These capabilities provide regulatory oversight mechanisms and are intended to strengthen reserve management and protect stablecoin holders.
USDT and USDC Are Not Banned Under Nigeria's New Rules
Despite the stricter regulatory requirements, Nigeria has not introduced an outright ban on Tether's USDT, Circle's USDC, or private peer-to-peer cryptocurrency transactions.
Instead, the framework establishes conditions that companies must satisfy when issuing, distributing, exchanging, or facilitating regulated stablecoin activities within the country.
The rules also prohibit stablecoin issuers from paying interest or offering other financial rewards simply for holding their tokens. In addition, regulated stablecoins are not classified as bank deposits and are not covered by protection from the Nigeria Deposit Insurance Corporation.
For Tether, Circle, and domestic cryptocurrency businesses, maintaining regulated access to the Nigerian market will depend on meeting the applicable licensing, capital, reserve, and operational requirements.
The framework could reshape how stablecoin companies structure their Nigerian operations, particularly as issuers and trading platforms assess the financial and compliance obligations required to serve local customers.
Writer: Marcus RenfieldCrypto Market Analyst & Onchain WriterMarcus Renfield covers cryptocurrency markets with a focus on onchain data, Bitcoin price action, and emerging market narratives. His writing examines how capital flows, network activity, and broader market structure influence short- and medium-term trends.He aims to provide clear, data-informed analysis for readers seeking a deeper understanding of crypto market dynamics.