Nigeria’s central bank mandates licenses for stablecoin issuers

Nigeria's central bank barred banks from servicing crypto exchanges in 2021 and reversed that stance in December 2023, while the Securities and Exchange Commission built separate rules for tokens treated as securities. Stablecoins fell outside that net until now. The naira's repeated devaluations since 2023 pushed many Nigerians toward dollar-pegged tokens such as USDT for savings, while the central bank's own naira-referenced coin, cNGN, has struggled to attract users.

Issuers of dollar-linked stablecoins such as Tether and Circle must now set up a Nigerian subsidiary, hold local capital of roughly $11 million, and pass reserve tests before offering tokens to retail users, while foreign issuers more broadly face a ₦15 billion capital bar. Firms that skip this process risk losing access to Nigerian exchanges and payment apps, while licensed local players and naira-pegged alternatives like cNGN gain an opening that foreign giants currently hold by default.

Banning algorithmic designs reads as caution learned from TerraUSD's 2022 collapse, but the capital and local-presence wall raises a harder question of financial sovereignty: Nigerians have turned to dollar stablecoins precisely because the naira has been unreliable, and a licensing barrier that foreign issuers may not clear could push that demand into informal, unregulated channels rather than erase it. Protecting consumers and preserving access to dollar savings are not automatically the same goal here. (per crypto-economy.com)

The rulebook took effect on November 5, leaving open how long foreign issuers get to come into compliance before enforcement bites. Whether Tether or Circle actually establish licensed Nigerian entities, or instead let their tokens go unauthorized locally, will show if the framework widens access to regulated stablecoins or narrows it. cNGN's uptake in the coming months will indicate whether Nigerians shift to the local option or keep relying on offshore dollar tokens.

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