Central Bank of Nigeria (CBN) has granted approval for the launch of the Nigerian naira (cNGN) stablecoin, scheduled to go live on February 27, 2024.
The cNGN will be powered by the Africa Stablecoin Consortium (ASC), a collaborative effort involving Nigerian financial institutions, fintechs, and blockchain experts.
Stablecoins, known for maintaining a constant value by being pegged to another currency, commodity, or financial instrument, are gaining prominence in the global financial landscape.
In an official statement released on Thursday, the ASC revealed that the cNGN stablecoin has met the regulatory standards set by the CBN, the Nigerian Securities and Exchange Commission (SEC), and the Nigerian Financial Intelligence Unit (NFIU). The consortium emphasized its commitment to fostering secure and compliant financial interactions, revolutionizing the way people engage with their money securely and effortlessly.
The ASC statement highlighted the transformative potential of the cNGN stablecoin, stating, “This ushers in a new era of financial fluidity, bridging the Nigerian Naira with the global market through blockchain technology.”
Backed 1:1 by Naira reserves held in designated commercial banks, the cNGN Stablecoin is expected to streamline worldwide remittances, commerce, trade, and investment. The stablecoin is positioned to offer unprecedented efficiency in both domestic and global financial transactions.
The ASC explained how the cNGN stablecoin works, stating that it can simplify payments, enabling users to pay for anything, anywhere, and at any time. The cNGN aims to eliminate traditional challenges such as currency conversion and hefty international transaction fees. Users can shop globally and pay in Naira, making transactions swift, cost-effective, and free from currency-related complications.
The consortium also emphasized the impact of the stablecoin on facilitating international trade, enabling instant payments, and supporting freelancers worldwide. The cNGN is positioned as a tool to boost economic growth, global success, and financial inclusion.
The launch of the cNGN follows the CBN’s fresh operational guidelines on virtual assets service providers (VASPs) issued on December 22, 2023. The guidelines marked a shift from the CBN’s previous stance restricting cryptocurrency transactions, signaling a more open approach to virtual assets.