Nigeria has launched a second cohort for its regulatory sandbox, opening a supervised testing environment for virtual asset operators, Fintechs, and financial institutions as the country moves to consolidate oversight of its rapidly expanding digital finance sector. The Central Bank of Nigeria (CBN) announced on Tuesday that applications for the programme will be accepted from August 12 to August 31.
The initiative introduces two distinct tracks. A Virtual Asset Service Provider (VASP) track targets companies offering stablecoins, payment and settlement services, custody solutions, wallets, and related financial infrastructure. A second Data-Enabled Financial Services track, designated for non-VASP entities, focuses on firms leveraging secure digital infrastructure and permission-based data sharing to enhance payments, credit access, risk management, and financial inclusion.
The sandbox represents the CBN’s latest step in regulating the virtual asset industry. Under the new framework, the central bank will supervise virtual assets used for payments, including stablecoins, custody, wallet management, and transaction-based infrastructure. The Nigerian Securities and Exchange Commission (SEC) retains oversight of digital assets that function as securities.
This structure follows a pilot programme launched in March, during which the CBN tested its supervisory approach with selected fintechs, including Flutterwave, Paystack, and Juicyway, to assess the stability of payment and cross-border infrastructure linked to stablecoins. The new sandbox operates alongside the SEC’s Accelerated Regulatory Incubation Programme (ARIP), which admitted nine digital asset-based investment companies in July.
The CBN said the sandbox will prioritize stablecoin providers, on- and off-ramp companies, payment processors, settlement infrastructure operators, custody platforms, and wallet-service providers. “The CBN Regulatory Sandbox provides a controlled environment in which eligible participants may test innovative financial products, services, business models, and enabling technologies under the supervision of the Central Bank,” said Sidi-Ali Hakama, the CBN’s Acting Director of Corporate Communications. He noted the programme allows the regulator and innovators to engage constructively, supporting regulatory learning while encouraging responsible innovation.
The launch follows President Bola Tinubu’s July 18 Executive Order establishing a Virtual Asset Council to harmonise regulation across agencies. Chaired by the CBN, the council includes the Nigeria Revenue Service (NRS) and the SEC as vice-chairs, alongside the Nigerian Financial Intelligence Unit (NFIU) and the Office of the National Security Adviser (ONSA). The NRS released a tax framework for virtual assets on August 3. The council evolved from a February white paper proposing coordinated oversight, with the executive order formalising the structure to close supervisory gaps, strengthen anti-money laundering controls, and improve consumer protection. An inaugural meeting was held at the CBN headquarters in Abuja on July 29.
Nigeria remains one of the world’s most active cryptocurrency markets. According to Chainalysis, Nigerians transacted approximately $92.1 billion in cryptocurrencies between July 2024 and June 2025, ranking the nation as Africa’s largest virtual assets market by volume. Stablecoins are increasingly underpinning payments and remittances as fintechs build infrastructure around stablecoin-based rails.
The CBN emphasized that participation in the sandbox does not constitute a licence to operate beyond approved testing parameters. Successful applicants must comply with safeguards covering consumer protection, operational resilience, cybersecurity, and regulatory reporting. Hakama stated that insights from the supervised testing will deepen regulatory understanding of emerging technologies and inform the ongoing development of frameworks for Nigeria’s evolving digital financial ecosystem. For operators, the August application window provides the first opportunity to enter the CBN’s supervised environment under the newly coordinated regime.
