CBN Opens Sandbox to Virtual Assets, Data-Driven Financial Innovations

• Says initiative will shape regulatory frameworks amid evolving digital financial ecosystem, others

•National Payment Stack records 26.55m transactions worth N1.4trn one year after launch by NIBBS

James Emejo in Abuja and Nume Ekeghe in Lagos

The Central Bank of Nigeria (CBN) yesterday announced it has opened the second cohort of its Regulatory Sandbox Programme, creating dedicated testing channels for virtual asset-related innovations and data-enabled financial services.

The apex bank move seeks to balance financial technology development with stability and consumer protection.

Under the new cohort, eligible innovators, financial institutions, Virtual Asset Service Providers (VASPs), fintechs and technology companies will be able to test new products, services, business models and enabling technologies within a controlled environment supervised by the central bank.

The apex bank disclosed the development in a statement issued by its acting Director, Corporate Communications and Investor Relations Department, Mrs. Hakama Sidi Ali in Abuja.

This came as the National Payment Stack (NPS), the country’s next-generation payment infrastructure, said it processed 26.55 million transactions valued at N1.4 trillion across 48 participating institutions, about one year after it was launched by the Nigeria Inter-Bank Settlement System (NIBSS) Plc.

The sandbox initiative is expected to provide a structured pathway for emerging financial technologies to be tested under real-world conditions without exposing the wider financial system to unmanaged risks.

The CBN further stated that the programme formed part of its broader commitment to building an innovative, resilient and inclusive financial ecosystem capable of supporting sustainable economic growth while preserving the safety, soundness and integrity of the nation’s financial system.

The second cohort introduces two dedicated testing tracks – the Virtual Asset Service Provider (VASP) Track and the Data-Enabled Financial Services (Non-VASP) Track.

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

On the other hand, the Data-Enabled Financial Services Track, will focus on innovations leveraging secure digital infrastructure and permission-based data sharing to advance financial inclusion, payments, credit, risk management, operational efficiency and consumer outcomes.

According to Sidi-Alli, the regulatory sandbox is designed to enable innovators and the regulator to engage throughout the testing process, allowing both sides to learn from the practical application of emerging technologies.

She said the approach would support regulatory learning while encouraging innovations capable of delivering tangible benefits to consumers and the broader financial system.

Also, commenting on the launch, CBN Director, Payments System Policy Department, Mr. Musa Jimoh, said financial innovation was continuing to transform the way individuals and businesses access and use financial services.

He said, “The CBN Regulatory Sandbox, which is powered by technology in partnership with EMTECH, enables innovators and regulators to engage in a structured and collaborative manner, allowing promising solutions to be tested responsibly while maintaining appropriate 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 that is aligned with the long-term development of our financial system.”

The central bank said the launch of the second cohort was consistent with its commitment to establishing a transparent, proportionate and risk-based regulatory environment that promotes innovation without compromising monetary and financial stability.

The CBN further stated that lessons derived from supervised testing would deepen its understanding of emerging technologies and contribute to the development of regulatory and supervisory frameworks for evolving digital financial ecosystem.

Under the programme, prospective participants will not be admitted solely on the basis of having a novel technology or business model.

Rather, the central bank said applications would be assessed against several criteria, including the level of innovation, readiness for controlled live testing, potential benefits to consumers or the market, governance arrangements, risk management capacity and the suitability of the proposed testing plan.

Successful applicants will subsequently conduct supervised testing within parameters agreed with the CBN.

The testing arrangements will incorporate safeguards covering consumer protection, operational resilience, cybersecurity and regulatory reporting, reflecting the apex bank’s emphasis on ensuring that innovation does not come at the expense of financial system integrity.

The framework is particularly significant for emerging virtual asset businesses, which operate in an area where technological innovation can rapidly outpace conventional regulatory approaches.

By creating a dedicated VASP testing track, the CBN is providing a formal environment for qualifying virtual asset and related infrastructure solutions to be evaluated under regulatory supervision.

At the same time, the separate non-VASP track broadens the programme’s scope beyond virtual assets to technologies capable of improving how financial institutions and other providers use data to deliver services.

The central bank however, clarified that participation in the sandbox will not amount to regulatory approval to operate as a fully licensed financial service provider.

It specifically pointed out that admission into the programme does not constitute a licence, authorisation or approval to operate outside the testing parameters approved by the CBN.

Instead, the sandbox is intended to facilitate controlled experimentation, strengthen engagement between innovators and regulators and generate evidence that can inform future policy and regulation.

Applications for the second cohort will open on August 12- 31, 2026.

Meanwhile, the NPS, Nigeria’s next-generation payment infrastructure, has disclosed that it has processed 26.55 million transactions valued at N1.4 trillion across 48 participating institutions, about one year after it was launched by the NIBSS.

The NIBSS in a statement yesterday, disclosed that FirstBank currently leads the platform in transaction volume, while Fidelity Bank ranks highest in transaction value, highlighting the growing adoption of the new payment rail by financial institutions.

Other major participants driving activity on the platform include Guaranty Trust Bank, Sterling Bank, Access Bank and Moniepoint.

The NIBSS unveiled the NPS in June 2025 as a sovereign, ISO 20022-compliant payment infrastructure designed to modernise Nigeria’s payments ecosystem and ultimately succeed the legacy NIBSS Instant Payment (NIP) system.

The platform recorded its first live transaction in November 2025, involving PalmPay and Wema Bank, marking the commencement of its operational phase.

Since then, the NPS has continued to gain traction among participating financial institutions, with the latest figures showing the volume and value of transactions processed through the platform.

The platform brings payments, identity and data onto a unified digital infrastructure, while its multi-currency architecture is designed to support domestic transactions, cross-border payments and greater regional financial connectivity.

Built on the ISO 20022 messaging standard, the NPS enables structured and metadata-rich transaction information, with applications for automated corporate reconciliation, merchant collections and request-to-pay invoicing.

The platform also supports high-volume corporate disbursements alongside regular transfers, as well as direct debits, asynchronous processing and deferred settlement options.

 It further embeds security and compliance functions, including automated sanctions screening, account validation, end-to-end encryption and in-flight risk scoring designed to identify potential fraud before transactions are executed.

For financial institutions, the infrastructure provides real-time visibility of net positions and continuous settlement accounting, with the potential to improve liquidity and treasury management.

Commenting on the development, the Managing Director and Chief Executive Officer of NIBSS, Premier Oiwoh, described the NPS as a catalyst for transforming Nigeria’s payments infrastructure.

 “The National Payment Stack represents is an economic catalyst moving our financial infrastructure from basic transaction processing to comprehensive payment intelligence.

“By delivering an ISO 20022-compliant, multi-currency rail, we are laying the groundwork for unprecedented interoperability, heightened security, and seamless regional trade,” Oiwoh said.

He stressed the need for participating financial institutions to accelerate their technical and operational integration with the platform.

 “To guarantee an optimal transaction experience for end-users, it is imperative that all participating financial services institutions immediately activate all related messages and fund transfer credit and debit processing rails.

“NIBSS remains committed to providing continuous technical support, detailed guidelines, and integration assistance to help institutions achieve full compliance with KYC validation standards and optimise API consumption.”

According to him, full integration would help prevent platform congestion, ensure proper usage standards and safeguard system performance as institutions complete the integration of Funds Transfer Debit and advanced messaging capabilities.

He said: “This proactive engagement will prevent platform congestion, enforce proper usage standards, and safeguard system performance as we work together with all institutions to complete integration for Funds Transfer Debit and advanced messaging capabilities.

“Ultimately, our shared objective is to achieve a seamless, full industry cut-over to the National Payment Stack as we prepare to decommission our 15-year-old legacy NIP rail.”

The CBN has also urged financial institutions to accelerate their integration with the NPS.

During a recent working visit to the NIBSS headquarters, the Director of the Payments System Supervision Department, CBN, Dr. Rakiya Opemi Yusuf, had called on financial institutions nationwide to step up their integration efforts.

Her position reinforces the apex bank’s regulatory support for the ISO 20022 standard and the broader transition towards a more modern and interoperable payments infrastructure.

The NPS is expected to play a key role in the next phase of Nigeria’s payments ecosystem as NIBSS works towards achieving full industry cut-over and eventually retiring the 15-year-old NIP infrastructure.

The latest transaction figures mark a significant milestone for the platform one year after its launch, reflecting its progression from initial deployment to wider adoption across Nigeria’s financial services industry.