A consortium of Nigerian banks, fintech companies, and blockchain companies is collaborating to develop a stablecoin called cNGN, pegged to the country’s fiat currency, the Naira. The stablecoin is planned to be launched in 2024 and will be recognized as a legal tender.
According to Forbes, the consortium, consisting of several Nigerian banks, fintech companies, and blockchain companies, is developing the cNGN stablecoin project for the Naira. Insiders familiar with the project revealed that cNGN is planned to be launched in 2024.
The concept of a stablecoin for the Naira has been circulating for several years. The most recent experiment was the NGNT launched by the Token Mint Alliance in 2019. The alliance consisted of major Nigerian cryptocurrency exchanges, such as Helirier and Busha, and was linked 1:1 to the Naira on the Binance Smart Chain and Ethereum. However, it was not considered a legal tender.
Unlike previous attempts, cNGN is reported to be a compliant stablecoin issued by a regulated consortium. It will be pegged 1:1 to the Naira and held by Nigerian banks, becoming a legal tender.
The main partners of this consortium include major Nigerian banks such as First Bank, Access Bank, Sterling Bank, Providus Bank, and payment companies like Budpay, Kora, Interswitch, as well as blockchain advisory companies Conexity and Interstellar. Their collaboration aims to facilitate seamless cross-border transfers for the Naira.
Despite these developments, there are still many unknowns regarding cNGN that need clarification from the issuing party, such as the choice of blockchain and the applications and services the stablecoin plans to offer to consumers.
It is important to note that the Central Bank of Nigeria (CBN) has already launched its own central bank digital currency (CBDC) called “eNaira” in 2021. The main difference between cNGN and eNaira is that cNGN is created using blockchain technology and will be maintained and held by the consortium, while eNaira is directly controlled by the CBN and the Securities and Exchange Commission of Nigeria, with the CBN recently lifting the ban on Bitcoin and issuing new guidelines for digital assets.
By 2024, Nigeria will have four different forms of the Naira in circulation, including NGN, eNaira, cNGN, and new and old Naira notes. This is expected to have an impact on Nigeria’s monetary policy, foreign exchange controls, and overall market dynamics.