CBN opens regulatory door to virtual assets, data-driven finance

The Central Bank of Nigeria (CBN) has opened applications for the second cohort of its Regulatory Sandbox Programme, creating a supervised pathway for virtual asset businesses, stablecoins and data-driven financial services to test new products in Nigeria’s financial system.

The programme, which opens on August 12 and closes on August 31, 2026, introduces two dedicated tracks, the Virtual Asset Service Provider (VASP) Track and the Data-Enabled Financial Services Track, in what could mark a significant expansion of the regulatory framework governing Nigeria’s rapidly evolving digital finance industry.

The VASP Track will accommodate innovations involving virtual assets, stablecoins, payments, settlement, custody, wallets and related financial infrastructure requiring supervised live testing.

The second track, which excludes virtual asset service providers, will focus on financial innovations using secure digital infrastructure and permission-based data sharing to improve financial inclusion, payments, credit, risk management, operational efficiency and consumer outcomes.

The CBN said the initiative is designed to allow innovators to test financial products, services, business models and technologies in a controlled environment while regulators observe their risks, benefits and implications for the wider financial system.

The move is significant for Nigeria’s financial sector as digital assets, fintech, open-data applications and technology-driven financial services continue to reshape how individuals and businesses access payments, credit, savings and investment products.

According to the apex bank, supervised testing will also enable it to gather evidence that can guide the development of future regulatory and supervisory frameworks for emerging technologies.

The CBN said the second cohort reflects its commitment to a transparent, proportionate and risk-based regulatory environment that supports innovation without compromising monetary and financial stability.

Director, Payments System Policy Department, CBN, Musa Jimoh, said financial innovation was fundamentally changing how individuals and businesses access and use financial services.

He said the CBN Regulatory Sandbox, powered by technology in partnership with EMTECH, provides a structured platform for regulators and innovators to test promising solutions while maintaining safeguards for consumers and the financial system.

“The introduction of dedicated tracks for Virtual Asset Service Providers and data-enabled financial services reflects the evolving nature of financial innovation and our commitment to ensuring that Nigeria’s regulatory environment continues to support responsible, transparent innovation,” Jimoh said.

The programme could also provide a testing ground for business models capable of expanding financial inclusion and improving the efficiency of Nigeria’s payments and credit markets, particularly where conventional financial infrastructure remains costly or inaccessible.

For virtual asset operators, the creation of a dedicated VASP track provides a more defined channel for engaging the regulator and demonstrating the viability, governance and risk controls of new products before wider deployment.

The CBN, however, stressed that entry into the sandbox should not be interpreted as a licence to operate as a financial institution or virtual asset service provider outside the approved testing parameters.

Applicants will be assessed on the level of innovation involved, readiness for controlled live testing, potential benefits to consumers and the market, governance structures, risk management capacity and the suitability of their proposed testing plans.

Successful applicants will conduct supervised tests within parameters agreed with the CBN, with requirements covering consumer protection, operational resilience, cybersecurity and regulatory reporting.

The programme therefore places greater emphasis on evidence-based regulation, allowing the CBN to understand emerging technologies through controlled market testing before determining how they should be regulated on a broader scale.

The latest move also comes as Nigeria’s financial system undergoes a wider digital transformation, with fintech companies increasingly expanding beyond traditional payments into lending, wealth management, digital banking, embedded finance and data-driven financial services.

By creating separate regulatory pathways for virtual assets and data-enabled finance, the CBN is effectively positioning its regulatory framework to accommodate a broader range of financial technologies while retaining oversight of risks that could threaten consumers and financial stability.

The bank urged eligible organisations to apply through its Regulatory Sandbox Portal before the August 31 deadline, stressing that the initiative is intended to promote responsible experimentation, strengthen regulatory engagement and support the development of an innovative, resilient and inclusive financial ecosystem.

The bigger economic implication is that Nigeria is moving from regulating digital finance largely after products reach the market towards testing emerging business models within a controlled regulatory environment, a shift that could determine how quickly the country attracts investment into the next generation of financial technology.