NIGERIA Law and Practice Contributed by: Omoruyi Edoigiawerie, Adebomi Adekeye and Habeeb Eyinade, EandC Legal
Interest and Yield To prevent stablecoins from being characterised as unauthorised deposits, issuers are prohibited from paying interest to holders. This restriction ensures that stablecoins remain pay- ment instruments or digital securities rather than tradi- tional bank accounts. Yield-bearing tokens are treated as collective investments (CIS), requiring a separate, more complex licence. The 2026 framework mandates monthly independent attestations and quarterly SEC audits. Any deviation from the HQLA composition requirements triggers immediate Post-No-Debit restrictions on the issuer’s custodial accounts. 6.2.4 Special Considerations Under the ISA 2025, the SEC and Financial Stabil- ity Advisory Council designate certain stablecoins as systemically significant. These issuers face: • mandatory buffers beyond the standard NGN2 bil- lion requirement; • higher HQLA ratios to ensure redemption during market stress; • submission of an SEC-approved “Living Will” for orderly winding-up; • intensive monitoring by the Virtual Asset Regula- tory Authority (VARA), focusing on contagion risks to the traditional banking sector; and • mandatory stress-testing of peg-stability protocols before full public deployment. 7. Tokenisation and Real-World Assets 7.1 Treatment In Nigeria, tokenised assets and real-world assets (RWAs) are regulated by the ISA 2025, which inte- grates them into the formal capital markets. Tokenised Assets Versus Non-Blockchain Equivalents Under the ISA 2025, tokenised RWAs are codified as digital securities. Unlike their paper-based equivalents governed by traditional property or contract law, RWAs must comply with the SEC Rules on Digital Assets.
Stablecoins may only be issued or facilitated by a licensed VASP. As of January 2026, these entities must meet a minimum paid-up capital of NGN2 billion. Bespoke Versus Traditional Framework Nigeria has avoided retrofitting stablecoins into exist- ing payment laws. Instead, it has integrated them into a specialised digital asset perimeter overseen by the SEC in co-ordination with the Virtual Asset Regulatory Council (VARC). Unlike the traditional CBN payment framework, which focuses on monetary stability and fiat circulation, the bespoke stablecoin regime prioritises market integrity, cryptographic transparency and on-chain settlement finality. 6.2.3 Backing Assets Under the ISA 2025 and the SEC Rules on Digital Assets (as amended in June 2025), fiat-backed sta- blecoins are subject to strict reserve and prudential mandates to ensure 1:1 parity and market stability. Reserve Requirements and Composition Issuers must maintain reserves equal to 100% of the tokens in circulation. High-quality liquid assets (HQLA) Under the 2026 Baseline Standards, backing assets are restricted to cash (naira or the pegged fiat), bank deposits and short-term government securities (eg, Nigerian Treasury Bills). Prohibited assets Exposure to equities, other cryptocurrencies or illiq- uid private credit is strictly prohibited to prevent de- pegging events. Custodial Restrictions Backing assets must be held with SEC-approved and CBN-regulated financial institutions within Nigeria. Offshore custody is generally restricted unless spe- cifically authorised by the SEC for foreign-fiat pegged coins, requiring a local custodial mirror or equivalent supervisory arrangement.
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