Central banks around the world continue to explore digital currency initiatives. Nigeria’s Central Bank has approved the regulatory pilot for the cNGN stablecoin project, managed by the Africa Stablecoin Consortium (ASC). The cNGN stablecoin is set to launch on February 27, 2024, offering a significant development in the country’s approach to digital currencies.
The ASC, a collaboration between Nigerian banks and fintech operators, confirmed that the cNGN stablecoin complies with regulatory requirements set by Nigerian financial authorities. The consortium has worked closely with regulators to ensure compliance, consumer protection, and transparency in the stablecoin’s operations.
The cNGN serves as a complement, not a replacement, to Nigeria’s Central Bank Digital Currency (CBDC), the eNaira. Unlike the eNaira, which is issued by the Central Bank of Nigeria with broader capabilities, the ASC oversees the cNGN stablecoin. It currently operates on strategic blockchain ecosystems such as Bantu and BNB Smart Chain, with plans to expand compatibility to all major blockchain networks.
The cNGN token is pegged at a 1:1 ratio to the Nigerian naira and is backed by reserves held in designated commercial banks. It aims to bridge the gap between the naira and cryptocurrencies in the global market through blockchain technology.
cNGN aims to facilitate instant money transfers for Nigerians abroad to their families in Nigeria, bypassing traditional remittance wait times and reducing costly international transaction fees. The Central Bank of Nigeria, recognizing the growing global demand for crypto, has lifted restrictions on Nigerian banks facilitating cryptocurrency transactions as of December 22, 2023.