Nigeria sets new crypto licensing rules, bans algorithmic stablecoins

Nigeria’s central bank has introduced new licensing and reserve requirements for cryptocurrency companies, tightening oversight of stablecoins and digital asset payment services in one of Africa’s largest crypto markets.The Central Bank of Nigeria (CBN) issued the Regulations for the Operations of Non-Security Virtual Assets on Thursday, establishing rules for stablecoin issuers, crypto payment providers, exchanges, custodians and other covered service providers.The regulations took effect immediately, though existing operators have 180 days to apply for licenses or authorizations. The CBN said the framework aims to support responsible innovation while protecting consumers and financial stability.The move follows President Bola Tinubu’s July executive order, which sought to coordinate crypto oversight among Nigerian authorities without changing their existing powers.Stablecoin issuers face new capital and reserve rulesUnder the new regulations, stablecoin issuers must fully back their tokens with reserve assets and maintain an additional buffer equal to at least 2% of their value. At least 40% of reserves must consist of cash or qualifying highly liquid assets.The rules also set mi...