Nigeria's Central Bank Approves Launch of cNGN Stablecoin

In a groundbreaking move, the African Stablecoin Consortium (ASC) has received the green light from the Central Bank of Nigeria (CBN) to initiate the pilot launch of their stable digital currency, known as cNGN. This approval marks a historic moment for the cryptocurrency market in Nigeria.

Until now, Nigerians have been using eNaira, the digital currency issued by the CBN. However, with the introduction of cNGN, the landscape is set to change. Unlike eNaira, which is under the direct control of the central bank, cNGN will be supervised by the ASC, a consortium comprising Nigerian banks and fintech operators.

CNGN is currently compatible with Bantu and BNB Smart Chain blockchains, with plans to expand its support across major blockchain networks in the future. It is pegged at a 1:1 ratio to the Nigerian Naira and is backed by fiat currency reserves held in commercial banks. This stablecoin is designed to facilitate the exchange of Naira and digital currencies on the global market.

One significant advantage of cNGN is its potential to simplify transactions for Nigerians living abroad who send money back home. Transaction fees for cNGN are expected to be low, especially when compared to traditional international transfers.

The move to approve cNGN follows a shift in the CBN's stance on cryptocurrencies, acknowledging the growing global demand for digital assets. In December 2023, the regulator lifted the ban on Nigerian banks participating in cryptocurrency transactions.

While the launch of eNaira in October 2021 aimed to improve access to banking services for the Nigerian population, adoption rates have remained low, even with over 40 million Nigerians lacking access to traditional banking. The introduction of cNGN could potentially reshape the financial landscape in Nigeria, offering greater flexibility and accessibility to digital currency.