The Central Bank of Nigeria (CBN) plans to use blockchain infrastructure to monitor stablecoin activity as the regulator prepares to bring digital currencies closer to the country’s formal payments system.
The plan, outlined in the CBN’s Payments System Vision 2028, would allow the central bank to operate observer nodes on blockchain networks that support approved stablecoins. The nodes would give the CBN read-only access to transaction activity on those networks without allowing it to alter the blockchain.
The proposal comes as stablecoins become increasingly important for payments and cross-border transfers in Nigeria.
How the CBN plans to monitor stablecoins
An observer node is a copy of a blockchain’s network infrastructure that allows a participant to view and verify activity on the network.
Under the CBN’s proposal, the central bank would run these nodes on networks supporting stablecoins that have received regulatory approval.
This would give the regulator direct visibility into on-chain transactions and allow it to monitor activity without relying entirely on information supplied by exchanges, wallet providers or other intermediaries.
The CBN’s plan is focused on blockchains supporting approved stablecoins. It therefore does not mean that the central bank would automatically have visibility into every stablecoin transaction taking place across all blockchain networks.
Stablecoins gain attention from Nigerian regulators.
The CBN’s interest in stablecoins comes as their use grows in Nigeria, particularly for cross-border payments.
An International Monetary Fund analysis published in June found that Nigeria accounted for about 60% of stablecoin inflows into sub-Saharan Africa since 2019. The IMF said stablecoins have become an important channel for cross-border payments in Nigeria, where users rely on dollar-pegged digital assets for remittances, payments and other transfers.
The CBN has also recently opened a dedicated virtual-asset track under its regulatory sandbox. The programme allows companies working on stablecoins, wallets, custody, payments and related infrastructure to test their products under CBN supervision.
The sandbox does not give participating companies a licence to operate outside the terms of their approved tests.
Why the CBN wants visibility
Stablecoins can provide faster and cheaper ways to move value across borders, but their growing use also creates challenges for financial regulators.
Because stablecoins can move directly between blockchain wallets, transactions can take place outside the traditional banking channels that regulators have historically monitored.
The IMF has also identified stablecoins as a growing cross-border payments channel in Nigeria and said better data on their use would help policymakers understand the risks and benefits associated with them.
The CBN’s proposed observer-node system would give it another source of transaction data for networks supporting approved stablecoins.
The plan fits into the CBN’s wider Payments System Vision 2028, which gives stablecoins significant attention as part of the future of Nigeria’s payments system.
Nigeria is building a formal framework for digital assets
The CBN’s approach comes as Nigerian regulators establish separate responsibilities for digital assets. The Securities and Exchange Commission (SEC) regulates digital assets and virtual-asset activities that fall within the capital-market framework, while the CBN oversees payment systems and financial institutions.
In August, the CBN also introduced a virtual-asset track in its regulatory sandbox for stablecoin, wallet, custody and payment infrastructure providers. The observer-node proposal adds another layer to this regulatory framework by giving the central bank a way to monitor activity directly on blockchain networks supporting approved stablecoins.
For now, the proposal is contained in the CBN’s Payments System Vision 2028. Its effectiveness will depend on which stablecoins and blockchain networks are approved and how the monitoring system is implemented. As stablecoins become more common in Nigeria’s payments and cross-border transactions, the CBN is positioning blockchain data as part of its regulatory toolkit.
Read more: US Banking Regulator Races to Meet January Deadline for Stablecoin Rules Under GENIUS Act.