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The guidelines superseded the 2021 restrictions on banking relationships with virtual-asset companies, although Nigerian banks remained prohibited from holding or trading virtual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.
