CBN sets N15bn capital requirement for foreign currency stablecoin issuers

The Central Bank of Nigeria (CBN) has introduced a minimum capital requirement of N15 billion for firms issuing foreign currency-backed stablecoins, ruling out exemptions for offshore operators targeting the Nigerian market.

Under its new Regulations for the Operations of Non-Security Virtual Assets, the apex bank requires issuers of naira-referenced stablecoins to maintain a minimum paid-up capital of N10 billion, while foreign currency-referenced stablecoin issuers must hold N15 billion.

The CBN said the capital requirements must be maintained at all times and could be reviewed upwards by the bank.

Other virtual asset service providers offering custody, exchange or payment services involving regulated tokens are required to maintain a minimum capital of N1 billion.

The regulations further stipulate that firms holding licences from the Securities and Exchange Commission (SEC) must meet the CBN’s capital requirements separately, as funds used to satisfy one regulator’s requirements cannot be counted towards the other.

The apex bank also ruled out any offshore exemption, requiring foreign and local issuers targeting Nigerian customers to comply with its incorporation, licensing and capital requirements.

Under the framework, all Class 1 issuers, which issue naira-referenced stablecoins, must be incorporated in Nigeria, while applicants seeking Class 2 licences for foreign currency-referenced stablecoins must establish a Nigerian entity before obtaining final approval.

The regulations also cover foreign issuers whose tokens are offered or marketed to Nigerians, regardless of whether they maintain a physical presence in the country.

The CBN fixed the application fee for both categories of stablecoin issuer licences at N10 million, with an annual renewal fee of N5 million.

For existing operators, the bank provided a 180-day transition period from the commencement of the regulations to obtain the appropriate licences.

During the transition period, existing operators are permitted to continue business only at their current operational scale. They must also register with the CBN within 30 days and commence supervisory reporting within 60 days or any earlier period prescribed by the bank.

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Operators that fail to secure the required licences within the stipulated period must suspend operations until they obtain approval.

The regulations further provide that existing foreign currency stablecoin arrangements will be assessed against incorporation, issuer licensing and service-provider requirements.

Continued access to the Nigerian market during such assessments will require express interim permission from the CBN, which the bank said would not amount to a permanent exemption.

The apex bank warned that operating without the required licence would attract a minimum fine of N100 million, alongside an additional penalty of at least N1 million for every day the violation continues.