The Central Bank of Nigeria announced on Tuesday that applications had opened for the second cohort of its Regulatory Sandbox Programme, introducing a dedicated Virtual Asset Service Provider track for the first time.
The track will allow companies developing products involving virtual assets, stablecoins, payments, settlement, custody, wallets and related financial infrastructure to test them in a controlled environment under direct CBN supervision.
Applications opened on August 12 and will close on August 31.
The programme does not amount to a licence to operate, and companies admitted to the sandbox will only be allowed to test their products within parameters agreed with the central bank.
But the decision is significant for a country where regulators are attempting to bring a large and rapidly developing digital-asset economy inside a clearer regulatory perimeter.
Nigeria received more than $92.1 billion in crypto value during the 12 months covered by Chainalysis’ 2025 Sub-Saharan Africa study, almost three times the value received by South Africa, the region’s next-largest market.
Stablecoins have become particularly important.
Chainalysis found evidence of multi-million-dollar stablecoin transactions supporting trade between Africa, the Middle East and Asia, alongside their wider use as an alternative settlement mechanism in markets where traditional cross-border payments can be slow or expensive.
From crypto restrictions to supervised testing
The new sandbox highlights how dramatically Nigeria’s approach to virtual assets has changed in five years.
In February 2021, the CBN directed banks and other regulated financial institutions to stop facilitating cryptocurrency transactions and providing banking services to cryptocurrency exchanges.
That position changed in December 2023. The central bank issued new guidelines allowing financial institutions to open and operate accounts for Virtual Asset Service Providers subject to regulatory conditions.
In explaining the reversal, the CBN acknowledged that global trends increasingly favoured regulating VASPs rather than attempting to keep them outside the banking system.
The guidelines superseded the 2021 restrictions on banking relationships with virtual-asset companies, although Nigerian banks remained prohibited from holding or trading virtual currencies on their own account.
Nigeria has since continued to formalise the industry. The Investment and Securities Act 2025 explicitly brought virtual and digital assets within the country’s definition of securities, strengthening the statutory foundation for their regulation.
The Securities and Exchange Commission, which regulates virtual-asset businesses operating in the capital market, has also been gradually admitting companies through its Accelerated Regulatory Incubation Programme.
As recently as July, the SEC admitted GIGX Technologies and KuCoin Nigeria into the programme, granting both Approval-in-Principle while stressing that the status does not constitute a final licence.
The CBN’s latest move adds another layer to that regulatory architecture. Instead of focusing principally on whether banks can provide services to regulated crypto companies, the central bank will now directly observe some virtual-asset technologies being tested.
Stablecoins move closer to the regulatory centre
The inclusion of stablecoins is particularly noteworthy. Unlike more volatile cryptocurrencies, stablecoins are generally designed to maintain their value against currencies or other assets, making them increasingly useful for payments and cross-border settlement.
Their growing use in Africa has attracted regulatory attention because they can simultaneously offer cheaper financial infrastructure and raise questions around foreign exchange flows, monetary policy, consumer protection and financial stability.
Chainalysis said Sub-Saharan Africa was the world’s third-fastest-growing crypto region in 2025, with on-chain transaction volumes increasing by more than 50% year-on-year.
Nigeria and South Africa were its largest markets, while Ethiopia, Kenya and Ghana completed the region’s top five.
The research firm said Nigeria’s scale reflected not only its large and digitally connected population but also inflation and difficulties accessing foreign currency, which increased the attractiveness of stablecoins and other digital assets.
That makes Nigeria an important regulatory test case beyond its borders.
South Africa has moved further towards licensing crypto-asset service providers, while regulators elsewhere on the continent are still developing frameworks for a market whose adoption has often moved faster than regulation.
CBN creates a second track for fintech
Virtual assets make up only one half of the new programme. The CBN has also established a Data-Enabled Financial Services Track for financial innovations that do not involve VASPs.
That track will cover technologies using secure digital infrastructure and permission-based data sharing to improve areas including payments, credit, financial inclusion, risk management, operational efficiency and consumer services.
The central bank said applicants to both tracks will be assessed on innovation, readiness for live testing, potential consumer or market benefits, governance, risk-management capabilities and the quality of their proposed testing plans.
Successful companies will operate under agreed safeguards covering consumer protection, cybersecurity, operational resilience and regulatory reporting.
The sandbox is being operated in partnership with financial technology company EMTECH.
Musa Jimoh, the CBN’s Director of Payments System Policy, said the separate virtual-asset and data tracks reflect the changing nature of financial innovation and the regulator’s attempt to create an environment that supports new technology without compromising financial stability.
The CBN also stressed an important limitation: admission to the sandbox is neither regulatory authorisation nor permission for a company to operate beyond the specific boundaries of its test.
That distinction will matter as Nigeria’s crypto market becomes more formally regulated.
The SEC this year introduced revised capital requirements covering virtual-asset businesses, including ₦2 billion minimum capital requirements for digital asset exchanges and digital asset custodians, and ₦1 billion for digital asset offering platforms.
Nigeria is therefore not simply becoming more permissive towards crypto.
Instead, regulators appear to be building a more controlled system in which virtual-asset businesses can gain access to traditional financial infrastructure, but face increasingly formal requirements around licensing, capital, governance and supervision.
Opening the central bank’s regulatory sandbox to stablecoins and other virtual-asset infrastructure is the latest step in that transition, and one that could help shape how other African regulators approach a digital-asset market that is already operating at significant scale.