CBN Introduces Tough Rules For Crypto Firms, Sets N100m Fine For Unlicensed Operators
By Sunday Etuka
The Central Bank of Nigeria (CBN) has introduced tougher licensing, reserve management and consumer protection rules for virtual asset service providers, prescribing a minimum fine of N100 million for entities that conduct regulated activities without required authorisation.
Under its new Regulations for Operations of Non Security Virtual Assets in Nigeria released on Friday, the apex bank requires individuals and corporate entities undertaking virtual asset activities in or from Nigeria or targeting Nigerian customers to obtain appropriate licence, authorisation or approval
Regulations cover issuance, distribution, exchange, conversion, custody, transfer, payment, remittance, clearing and settlement of non security virtual assets including stablecoins and Deposit Money Tokens.
A key provision requires stablecoin issuers seeking to serve the Nigerian market to operate through locally incorporated entities and obtain specific CBN licences. Naira referenced stablecoins must maintain one to one value with naira and be backed by eligible naira denominated reserve assets.
Foreign currency referenced stablecoins offered to Nigerian customers must also be issued through Nigerian incorporated entities holding appropriate Class 2 licence. CBN makes clear that foreign regulatory approval or partnerships with local intermediaries cannot replace its licensing requirements.
Framework places particular emphasis on reserve protection. Issuers are required to keep reserve assets separate from operational funds, maintain prescribed backing and liquidity arrangements and provide independent reserve attestations. Stablecoin holders are also given priority claims over other creditors in event of issuer insolvency.
Regulations establish redemption and disclosure obligations while prohibiting issuers from paying interest or yield to stablecoin holders. They also clarify that stablecoins are not bank deposits and are not covered by Nigeria Deposit Insurance Corporation deposit guarantee scheme.
CBN has prescribed significant penalties for violations. Unlicensed operators face a minimum fine of N100 million with additional penalty of at least N1 million for every day breach continues.
Breaches of anti-money laundering, counter-terrorism financing and counter-proliferation financing requirements attract a minimum fine of N50 million per breach alongside possible restitution. Fraudulent or deliberate misrepresentation to CBN or public concerning reserve management or stablecoin operations attracts a minimum fine of N500 million and referral for criminal prosecution under applicable laws.
Regulations also provide for sanctions against directors, senior management, officers and other key function holders found responsible for breaches where permitted by law.
CBN said the framework was intended to support responsible innovation while safeguarding monetary and financial stability, protecting consumers and strengthening integrity of the financial system. It is also designed to provide a controlled basis for integrating virtual assets into Nigeria payment and settlement infrastructure.
Regulations are anchored on CBN Act 2007, Banks and Other Financial Institutions Act 2020, Money Laundering Prevention and Prohibition Act 2022 and other applicable laws in line with Presidential Executive Order on Virtual Assets Coordination 2026.
