Nigeria bans algorithmic stablecoins and introduces issuer licensing rules
The Central Bank of Nigeria requires virtual asset service providers and stablecoin issuers to obtain local licenses to operate in the country.
Key takeaways
- 1The Central Bank of Nigeria issued new rules requiring local licenses for stablecoin issuers and virtual asset service providers on 6 November 2026.
- 2The new regulatory framework completely prohibits algorithmic stablecoins.
The Central Bank of Nigeria introduced new virtual asset regulations on 6 November 2026, requiring all stablecoin issuers and crypto service providers operating in the country to obtain local licenses.
The Block reported that the central bank's updated framework explicitly bans algorithmic stablecoins, which rely on code rather than collateral backing to keep their value stable. Virtual asset service providers must now secure formal authorisation from the regulator to maintain legal business operations in the jurisdiction.
Regulatory policy for digital assets in Nigeria has evolved rapidly over recent years across multiple government institutions. The Securities and Exchange Commission of Nigeria began issuing formal crypto licenses to exchanges in 2024, while digital asset gains face a 10 percent tax under the 2023 Finance Act. Stablecoins play a significant role in local trade, helping businesses and individuals transfer money internationally amid local currency volatility.
The outright ban on algorithmic models shows central bank caution regarding tokens that lack direct fiat reserves. Industry participants will watch how fast the regulator processes local license applications and whether major international stablecoin issuers set up legal entities inside the country to meet the mandatory standards. Market participants will also monitor whether existing services pause operations during the transition phase.
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Reported and edited by the YourKhabri desk under our editorial policy. Nothing here is investment advice.