Given the huge benefit and adoption rate, Nigeria has made plans to launch its cNGN stablecoin.
Some experts are of the opinion that the cNGN may be the solution to Nigeria’s economic challenges.
Africa Stablecoin Consortium (ASC) is preparing to unveil a compliant Nigeria Naira (cNGN) stablecoin in February.
ASC is a financial institutions, fintech and blockchain experts.
Have You Read: Nigeria Set To Develop Own Stablecoin cNGN In 2024
The consortium, in a recent statement noted that the cNGN launch aligns with the Central Bank of Nigeria’s new regulatory standards on virtual assets.
Earlier, the CBN had issues operating guidelines for Virtual Assets Service Providers (VASPs) for cryptocurrency.
This was after the Apex Bank relaxed the ban on cryptocurrency transactions.
Now, the consortium hopes that the cNGN stablecoin will transform financial transactions.
ASC believes that the cNGN will usher in a new era of financial fluidity and transform the Naira into a currency for worldwide remittances, trade and investment.
The cNGN is to be pegged 1:1 to the Nigerian Naira.
Experts explain that unlike eNaira, cNGN will be a cryptocurrency like other stablecoins (USDT, USDC) and not a Central Bank Digital Currency (CBDC).
The cNGN will be maintained by the consortium and will be held by the banks in the consortium.
Also, the CBN will not have direct control over the cNGN in the same way it does over the eNaira.
However, the Nigerian Securities and Exchange Commission (SEC), will have regulatory oversight.
The effects and benefits of the cNGN stablecoin on monetary policy and FX liquidity could be more significant than the eNaira, given its wider target reach.
You May Also Like: Big US Banks Are Threat To Stablecoin Issuers
Furthermore, the cNGN may have a greater adoption and success than the eNaira.
Especially given the recent relaxation of the CBN’s rules around banks’ participation in cryptocurrency.
Meanwhile, at the moment, there is an increasing number of Nigerians patronising cryptocurrencies. Also, the country records a high volume of crypto transactions.
Nigeria ranks second on the 2023 Global Crypto Adoption Index for Africa.
