CBN Tightens Stablecoin Rules, Bans Interest Payments and Introduces New Import Requirements

The Central Bank of Nigeria (CBN) has introduced new regulations governing stablecoins and other non-security virtual assets, tightening oversight of digital currency transactions and imposing fresh requirements on cryptocurrency service providers operating in the country.

The regulations, titled Regulations for the Operations of Non-Security Virtual Assets in Nigeria, took effect on November 5, 2026, and establish licensing, capital, consumer protection and operational requirements for businesses involved in stablecoin issuance and other regulated virtual asset activities.

Among the major provisions, the apex bank has prohibited stablecoin issuers from paying interest, yields, dividends or other financial benefits to individuals simply for holding their tokens.

The new framework also introduces documentation requirements for certain cryptocurrency-based international payments, including the use of Form M when foreign-currency-backed stablecoins are used to pay for imported goods.

CBN prohibits interest payments on stablecoins

Under the new regulations, stablecoin issuers are prohibited from offering financial returns to holders based on the amount of tokens they possess or deposit.

The restriction also covers arrangements in which exchanges, wallet providers or other intermediaries are used to indirectly provide prohibited returns.

This means that platforms offering interest or yield simply for holding payment stablecoins will have to reconsider their products to comply with the new framework.

The CBN also requires issuers to inform customers that stablecoins are not bank deposits and are not covered by the Nigeria Deposit Insurance Corporation’s deposit protection scheme.

The restriction is intended to distinguish payment stablecoins from investment products and reduce the possibility of consumers treating digital tokens as interest-bearing bank accounts.

Foreign stablecoin issuers face ₦15 billion capital requirement

Another major provision is the introduction of minimum capital requirements for stablecoin issuers.

Under the new classification, stablecoins are divided into two categories: Class 1, which covers naira-referenced stablecoins, and Class 2, which covers stablecoins linked to foreign currencies such as the US dollar.

Class 1 issuers must maintain minimum paid-up capital of ₦10 billion, while Class 2 issuers face a higher requirement of ₦15 billion.

Other non-security virtual asset service providers, including certain wallet, exchange, custody and transfer operators, are required to maintain at least ₦1 billion in paid-up capital.

Foreign stablecoin issuers seeking to serve Nigerian customers must also establish Nigerian-incorporated entities and obtain the appropriate CBN licence.

This means that obtaining regulatory approval in another country will no longer be sufficient to operate within the Nigerian market under the new framework.

The requirements could significantly affect smaller cryptocurrency businesses that may struggle to meet the financial and operational conditions.

New Form M requirement for cryptocurrency import payments

The regulations also introduce additional documentation requirements for businesses using foreign-currency stablecoins to pay for imported goods.

Under Section 11.10.5 of the framework, payments for imported goods made using Class 2 stablecoins must be supported by a valid Form M.

Form M is an import documentation instrument used in Nigeria to facilitate the processing and monitoring of imports through the country’s foreign exchange and trade procedures.

The requirement means that businesses using dollar-backed stablecoins for eligible import payments must comply with documentation obligations similar to those applicable to conventional foreign-exchange transactions.

The regulations also require relevant documentation for payments involving imported services.

By bringing these transactions under the existing foreign-exchange monitoring framework, the CBN aims to improve visibility over cross-border financial activities and reduce opportunities for regulatory evasion.

Tighter controls on peer-to-peer cryptocurrency transactions

The new framework also strengthens oversight of platform-facilitated peer-to-peer (P2P) cryptocurrency transactions.

Providers facilitating conversions between the naira and foreign-currency stablecoins must obtain the necessary CBN approval.

The naira component of such transactions must also be settled through, or reported to, an authorised dealer designated by the apex bank.

The regulations prohibit operators from dividing transactions across multiple platforms or channels to avoid regulatory limits, foreign-exchange monitoring and anti-money laundering requirements.

Licensed providers are also expected to implement customer identification procedures, transaction monitoring, sanctions screening and other compliance measures.

These requirements could affect how cryptocurrency exchanges and payment platforms facilitate transactions involving Nigerian users.

What happens to existing cryptocurrency businesses?

The CBN has introduced a transition period for businesses already operating within the regulatory framework.

Existing operators are required to register with the bank within 30 days, begin submitting supervisory reports within 60 days and complete their licence applications within 180 days.

Businesses that fail to meet the prescribed licensing requirements within the applicable period may be required to stop providing regulated services.

The framework also establishes penalties for violations, including fines for unlicensed operations, breaches of capital requirements and failures to comply with anti-money laundering obligations.

However, the CBN clarified that the regulations do not replace the Securities and Exchange Commission’s authority over virtual assets classified as securities and other capital-market products.

What does this mean for Nigerian cryptocurrency users?

The new regulations represent a significant development in Nigeria’s approach to digital assets.

For individual users, the prohibition on interest payments could affect platforms that offer returns simply for holding stablecoins.

For businesses, the new import documentation requirements and tighter controls on foreign-currency transactions could introduce additional compliance responsibilities when using digital assets for international trade.

Cryptocurrency exchanges, wallet providers and stablecoin issuers will also face increased regulatory and financial obligations.

While the CBN says the framework is intended to promote responsible innovation, protect consumers and strengthen financial stability, its implementation will determine how effectively Nigeria can balance regulatory oversight with the growth of its digital financial sector.

As cryptocurrency adoption continues to evolve, the challenge will be ensuring that stronger regulation does not unnecessarily restrict legitimate innovation and access to digital financial services.