Nigeria Bans Algorithmic Stablecoins: Local Company Requirement for Fiat-Based Ones

Nigeria’s central bank has issued a new stablecoin framework, effective November 5, 2026, that requires all stablecoin issuers to hold a license and bans algorithmic stablecoins outright. Foreign-currency-referenced stablecoins may only be offered in Nigeria through licensed local entities, forcing offshore issuers such as Tether (USDT) and Circle (USDC) to establish or partner with Nigerian firms. The rules matter because Nigeria is one of the world’s largest crypto adoption markets, where dollar-pegged tokens are widely used to hedge naira volatility, and the licensing requirement could reshape which stablecoins remain accessible. The ban on algorithmic models sidelines supply-and-demand-rebalancing designs in favor of fully backed tokens. What to watch next is how major issuers respond to the local-entity mandate and whether naira-referenced stablecoins gain ground ahead of the 2026 compliance deadline.