The Central Bank of Nigeria greenlit cNGN stablecoin to launch in February

The Central Bank of Nigeria (CBN) has approved the African Stablecoin Consortium (ASC) cNGN stablecoin to be lit in the regulatory sandbox. The new stablecoin will launch on February 27, 2024.

In a blog post, the ASC – a consortium of Nigerian banks and fintech operators – said the cNGN stablecoin complies with the regulatory requirements and standards set by the CBN, the Nigerian Securities and Exchange Commission and the Nigerian Financial Intelligence Unit. The group said it is liaising with regulators to ensure compliance, consumer protection and transparency.

CNGN serves as a complement to, not a replacement for, the eNaira, the central bank digital currency (CBDC) issued by the CBN. Unlike eNaira, which the CBN created in a broader capacity, ASC controls cNGN. The stablecoin currently works with strategic blockchains such as Bantu and BNB Smart Chain.

According to the blog post, the cNGN token is pegged 1:1 to the Nigerian naira, the country's currency, and is backed by naira reserves held in designated commercial banks. The stablecoin aims to bridge the gap between Naira and digital currencies in the global market through blockchain technology.

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CNGN aims to help Nigerians abroad send money to their families in Nigeria. It also aims to eliminate the expensive fees associated with traditional international transactions.

According to the blog post, the CBN wants to support and facilitate the use of blockchain technology in the financial system. In a circular sent to banks on December 22, 2023, the CBN noted that the increasing global interest and adoption of crypto has lifted restrictions on Nigerian banks facilitating cryptocurrency transactions.

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