The Central Bank of Nigeria (CBN) has opened applications for the second cohort of its Regulatory Sandbox Programme, introducing a dedicated track for Virtual Asset Service Providers (VASPs) and stablecoin-related financial services.
Applications opened on August 12 and will close on August 31, 2026. The programme gives eligible innovators a controlled environment to test financial products and business models under CBN supervision.
A Dedicated Track for Virtual Assets
The new VASP track covers virtual asset and stablecoin services that have payment, settlement or store-of-value functions.
Eligible use cases include digital wallets, custody services, virtual asset payments, exchange services, fiat on- and off-ramps, tokenised products and related infrastructure. The CBN said the track is intended to improve regulatory understanding of emerging business models while supporting innovation within defined risk parameters.
The sandbox will allow the central bank to observe how these products operate in real-world conditions before they are deployed more widely. It will also give regulators greater visibility into potential risks and emerging practices within the sector.
Nigeria Moves Towards Coordinated Virtual Asset Regulation
The sandbox comes shortly after President Bola Tinubu signed an Executive Order establishing a coordinated framework for virtual asset regulation in Nigeria.
The framework creates a Virtual Asset Council chaired by the CBN and establishes a Virtual Asset Office to coordinate regulatory activities among relevant government agencies. It does not create a new regulator or remove the statutory responsibilities of existing agencies.
Under the framework, the nature of the asset and activity will determine the relevant regulatory authority. Securities-related virtual assets will remain under the Securities and Exchange Commission, while the CBN will oversee payment, settlement, custody and related services involving non-security virtual assets.
The Presidency said the coordinated approach is intended to address gaps that previously allowed some unregistered operators to avoid regulatory oversight.
Focus on Stablecoins and Financial Stability
Stablecoins receive particular attention in the new sandbox because of their potential role in payments and financial services.
The CBN’s sandbox portal says the VASP track is focused on assets that are fiat-backed or have payment, settlement or store-of-value functions. It also links the programme to the CBN’s broader responsibilities around monetary sovereignty and financial system stability.
The regulator will also use the testing process to gain an early view of risks associated with emerging virtual asset business models. This could help shape future regulatory requirements as the sector develops.
What Firms Need to Apply
The programme is open to several categories of applicants, including CBN-licensed institutions, institutions licensed by other regulators, foreign regulated institutions, VASPs, startups and technology companies with sufficiently developed innovations.
Applicants are expected to have a legally incorporated company, identifiable ownership and beneficial owners, a developed product or minimum viable product, technical infrastructure, AML/CFT controls, consumer protection measures and a defined testing plan.
The CBN also expects applicants to have appropriate cybersecurity, risk management and compliance arrangements in place before entering the sandbox.