CBN Opens Cohort 2 of Its Regulatory Sandbox to Virtual Asset Service Providers

Lagos, Nigeria — The Central Bank of Nigeria opened applications for Cohort 2 of its Regulatory Sandbox Programme on August 12, 2026, introducing for the first time a dedicated Virtual Asset Service Provider (VASP) track alongside a Data-Enabled Financial Services (Non-VASP) track. Applications close August 31, 2026, submitted through the CBN's own portal at sandbox.cbn.gov.ng.

The VASP track covers fiat-backed stablecoins, payment tokens, custody solutions, digital wallets, token-based products, and fiat on/off-ramp services. The CBN ties eligibility explicitly to products that "perform a payment, settlement, or store-of-value function," reflecting the central bank's core concern with monetary sovereignty rather than trading or investment products, which fall under the Securities and Exchange Commission's separate regime.

Eligibility extends beyond CBN-licensed banks. The sandbox is open to institutions licensed by other Nigerian regulators, foreign regulated entities whose products can adapt to the Nigerian market, existing VASPs, and startups without any prior license — provided the product is a working MVP or production-ready solution with internal or external testing already completed. The CBN is explicit that "pure concepts or business ideas without demonstrable development are unlikely to qualify." Applicants must disclose all shareholders holding 5% or more of the company, ultimate beneficial owners, and any politically exposed person status, and must show they have already built AML/CFT/CPF controls, consumer risk-disclosure frameworks, and incident-reporting capability before applying. Sandbox testing itself operates under defined caps on user categories, transaction volumes, customer exposure, and test duration, with prompt reporting required for any material incident, including cyber events, fraud, or consumer harm.

Crucially, sandbox admission is not a license. The CBN states plainly that it "does not amount to a permanent licence or regulatory approval to operate beyond the approved testing parameters," and is not a substitute for registration with any other regulator — namely the SEC, which since the Investment and Securities Act 2025 took effect has held express statutory authority to register and regulate virtual and digital asset exchanges as market infrastructure. The SEC's Digital Asset Rules, in force since June 2025, require any platform enabling naira-denominated crypto trading — or simply marketing to Nigerian users — to register as a Digital Asset Exchange, and impose a ₦2 billion minimum capital requirement on exchanges and custodians.

The sandbox track builds on the CBN's December 2023 Guidelines on the Operation of Bank Accounts for VASPs, which reversed a February 2021 ban and gave VASPs a path to hold Nigerian bank accounts — conditional on SEC licensing, dedicated accounts used solely for virtual-asset transactions, no cash withdrawals or third-party cheques, and banks retaining transaction records for five years with 24-hour disclosure to the CBN on request.