A group of banks, fintechs, and blockchain startups in Nigeria are creating cNGN, the first regulated Naira stablecoin.
The new Naira stablecoin, cNGN, will be regulated and consortium-based. Unlike other stablecoin drafts, cNGN would be owned by Nigerian banks and be legal money, with a 1:1 peg to NGN.
Sources close to Forbes claim that the launch is scheduled for 2024. Unlike earlier iterations, cNGN will not be a CBDC but a cryptocurrency, similar to other stablecoins. Furthermore, the coin will be owned by its banks and maintained by the consortium.
“Nevertheless, there are still many unknowns about the cNGN that will need to be clarified by the consortium, such as the blockchain it will use and the planned apps and services for consumers.”
Notably, cryptocurrency transactions were permitted in Nigeria as recently as one day ago. Prior regulations that the nation’s central bank implemented in February 2021 forbade credit institutions from carrying out transactions pertaining to cryptocurrencies.
The knowledge that cryptocurrencies are essential to international financial institutions and will inevitably be used in Nigeria is the reason behind the relaxation of the ban.
Nigeria has already attempted multiple times to switch to digital currency. Nigeria launched its cashless policy in 2012 to improve the efficiency of its payment system, lower the cost of financial services, and enhance the efficacy of monetary policy by doing away with cash.
