- The Central Bank of Nigeria (CBN) approved a stablecoin pilot program within its regulatory sandbox for the cNGN stablecoin launching on February 27, 2024.
- The cNGN stablecoin is designed to complement the eNaira, pegged 1:1 to the naira, and built on public blockchains for interoperability by the Africa Stablecoin Consortium.
- Nigeria has high crypto adoption and an improving regulatory environment, making the cNGN approval a milestone for blockchain in the country’s financial system.
The Central Bank of Nigeria (CBN) has approved a pilot program for a new stablecoin to operate within its regulatory sandbox. This represents a significant step in embracing blockchain technology and digital assets in Nigeria’s financial system.
Africa Stablecoin Consortium to Launch cNGN
The cNGN stablecoin will be launched on February 27, 2024 by the Africa Stablecoin Consortium, a collaboration between Nigerian banks and fintech companies. The consortium stated that cNGN adheres to all regulatory standards set by the CBN, SEC, and NFIU. They emphasized a commitment to full compliance and transparency.
cNGN Details and Interoperability
The cNGN stablecoin is designed to complement the eNaira digital currency. It will be pegged 1:1 to the Nigerian naira and backed by reserves at commercial banks. cNGN is built on public blockchains like Bantu, Polygon, Ethereum, and BNB Smart Chain for global interoperability. This enables faster and cheaper cross-border transfers.
Regulatory Environment Improving in Nigeria
The CBN recently lifted restrictions on banks facilitating crypto transactions, signaling a more favorable environment. Nigeria has high crypto adoption, second only to India, partly due to residents hedging against the weakening local currency. Surveys show strong awareness and favorability toward crypto and blockchain in Nigeria.
Conclusion
The approval of cNGN is a milestone for blockchain adoption in Nigeria’s financial system. The regulatory sandbox pilot will provide key insights on managing risks while enabling innovation. The consortium’s commitment to full compliance is encouraging for future crypto growth in the country.
