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Following the recent lifting of a two-year ban on cryptocurrency trading through official channels in Nigeria, the country is gearing up to launch its first regulated Naira stablecoin, named cNGN.
A consortium comprising Nigerian banks, fintech companies, and blockchain businesses is actively developing the cNGN stablecoin. The new stablecoin is set to adhere to regulations established by stakeholders, providing a controlled and regulated counterpart to the Nigerian Naira.
Unlike earlier stablecoin drafts, the cNGN stablecoin will be owned by Nigerian banks and will be legally recognized as a form of currency. The value of the Nigerian Naira will be pegged at a 1:1 ratio to the cNGN stablecoin.
According to Forbes, the official debut of the cNGN stablecoin is scheduled for the year 2024. Notably, while the cNGN will function as a cryptocurrency similar to other stablecoins, it will not be a digital representation of the Naira, as seen in previous versions.
This development comes in the wake of the Central Bank of Nigeria’s decision to lift the prohibition on cryptocurrency transactions just last week. The consortium of banks will actively service and own the cNGN stablecoin.
In February 2021, the Central Bank, under the leadership of Mr. Godwin Emefiele, imposed restrictions on financial institutions engaging in cryptocurrency-related activities. This move impacted various Bitcoin firms, leading them to reevaluate their product offerings.
The decision to lift the cryptocurrency trading ban reflects a broader recognition of the significant role cryptocurrencies play in global financial systems. Nigeria, being one of the fastest adopters of digital currencies, acknowledges the inevitability of incorporating cryptocurrencies into its financial landscape.
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