Nigeria Requires Crypto Firms to License Under New Central Bank Rules
The rules set reserve and capital requirements for crypto firms, prohibit algorithmic stablecoins and give existing operators 180 days to apply.
Key takeaways
- Existing crypto operators have 180 days to apply for licenses or authorizations.
- The rules prohibit stablecoins that rely primarily on algorithms to hold their value.
Nigeria’s central bank has introduced licensing and reserve rules for crypto firms, including stablecoin issuers and payment providers. The regulations took effect immediately, with existing operators given 180 days to apply for licenses or authorizations.
Stablecoin issuers must fully back their tokens with reserve assets and hold an additional buffer equal to at least 2% of token value. At least 40% of reserves must be cash or qualifying highly liquid assets.
The rules prohibit stablecoins that rely primarily on algorithms to maintain their value, as well as tokens without enforceable redemption rights. Minimum paid-up capital is set at 10 billion naira for naira-backed issuers and 15 billion naira for foreign currency-backed issuers.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
