CBN Gives Crypto Operators 180 Days To Get Licensed

The Central Bank of Nigeria (CBN) has given existing virtual asset operators 180  days to apply for a licence, setting out a transition period that requires them to register with the Bank within 30 days and begin regulatory reporting within 60 days.

The deadlines are contained in the Regulations for the Operations of Non-Security Virtual Assets in Nigeria released by the apex bank on Friday.

They cover stablecoins, deposit money tokens and the firms that issue, trade, hold or move them. The 180 days run from the date the CBN specifies as the commencement of the regulations, which the Bank is to announce in the instrument that issues them.

Under the transition rules, an existing operator may keep operating during the 180 days, but only at its current scale and under interim conditions set by the CBN. To qualify, it must meet four conditions:

Comply with anti-money laundering, counter-terrorist financing and counter-proliferation financing requirements from the date the regulations take effect.

Begin supervisory reporting within 60 days, or earlier if the CBN prescribes.

Submit a complete licence application within the 180-day period.

An operator that fails to submit its application within that period must stop operating until it obtains the required licence or authorisation.

The regulations provide six licence categories: a Naira-referenced Issuer Licence (Class 1), a Foreign Currency Issuer Licence (Class 2), an Other Services Licence, an Other Services Authorisation, an Approval to Extend Permitted Activities, and a Deposit Money Token Licence.

The apex bank said that firms providing services such as custody, wallets, exchange and conversion, remittances, token distribution, payment gateways and stored-value facilities must obtain one of the service-provider approvals. The route depends on who already regulates them. A firm licensed by the Securities and Exchange Commission (SEC) applies for an Other Services Authorisation. A financial institution already licensed by the CBN applies for an Approval to Extend Permitted Activities. Every other firm applies for an Other Services Licence.

Issuer applicants pay a non-refundable application fee of N10 million for either Class 1 or Class 2, and an annual renewal fee of N5 million. Fees for service-provider approvals will be prescribed by the Bank.

Existing arrangements involving foreign-currency stablecoins will be assessed against the Nigerian incorporation, issuer licensing and service-provider approval requirements. Any continued access during that assessment requires the CBN’s express interim permission. The regulations say this permission does not give a permanent exemption.

The regulations state that there is no offshore issuer exemption. Class 2 issuers must hold ₦15 billion in paid-up capital, while Class 1 issuers must hold ₦10 billion. Other service providers must hold ₦1 billion. All applicants must be incorporated in Nigeria before final licensing, maintain a physical and management presence in the country, and appoint a Chief Compliance Officer and a Money Laundering Reporting Officer resident in Nigeria.

Platforms that facilitate peer-to-peer trading are covered by the same timeline. A person operating such a service when the regulations take effect must apply for approval within the same 180 days and may continue only on the same terms. The CBN will not create a separate licence category for these services. A platform must hold one of the service licences or authorisations and obtain express approval to run peer-to-peer services within its scope.

Issuer applicants go through a staged process. They submit an application for Approval-in-Principle, which the CBN assesses and may follow with interviews, independent reviews, demonstrations or inspections. Approval-in-Principle is not a licence and does not allow an applicant to begin operations. The final licence is granted only after the applicant is incorporated in Nigeria, meets the conditions attached to the approval, and passes an operational-readiness check. An issuer cannot issue a token until the CBN has also granted Token Approval for it.

An application that is incomplete will be returned in writing with a period to fix the gaps. Processing may be suspended until information is supplied, and an application suspended for six months or more requires a fresh application.

Operating without the required licence, authorisation or approval carries a fine of at least ₦100 million, plus an additional ₦1 million for each day the breach continues. The CBN may also order a firm to stop or restrict an activity, suspend or withdraw an approval, or issue a public warning naming the firm.

The Bank said it will track unlicensed operators, including those based outside Nigeria that target Nigerian users, using blockchain analytics, online monitoring, complaints, suspicious transaction reports and information from licensed firms, banks and the Nigerian Financial Intelligence Unit. It may direct licensed firms and financial institutions to take measures against transactions involving listed unauthorised persons. It may also ask the Nigerian Communications Commission to help restrict access to their services, and refer cases to law enforcement agencies. The CBN will publish a public register of licensed firms, along with the list of unauthorised persons.

The regulations apply to activities carried out in or from Nigeria, or directed at people in Nigeria, whether or not the firm has a physical presence in the country. They do not extend to virtual assets that are securities, which fall under the SEC.

The CBN said the framework is meant to support responsible innovation while protecting monetary and financial stability, consumers and the integrity of the financial system.