A consortium consisting of Nigerian financial institutions, fintechs, and blockchain experts, known as the Africa Stablecoin Consortium (ASC), is gearing up to launch the compliant Nigeria Naira (cNGN) stablecoin on February 27, 2024. The announcement follows the approval of the Regulatory Sandbox by the Central Bank of Nigeria (CBN).
The cNGN stablecoin, backed 1:1 by Naira reserves in designated commercial banks, is poised to redefine financial transactions. The consortium is committed to facilitating secure and compliant financial interactions, transforming the way individuals conduct transactions and manage their finances securely and seamlessly.
Transformation of the Naira
The cNGN is expected to convert the Nigerian Naira into a global settlement currency, marking a significant shift in financial dynamics. According to the ASC, the stablecoin will leverage blockchain technology, ensuring swift and cost-effective worldwide remittances, commerce, trade, and investment.
The consortium envisions the cNGN as more than just a currency. It aims to streamline settlement times, enabling rapid global payments comparable to the speed of a text message but at a fraction of the cost. This breakthrough is anticipated to facilitate instantaneous financial transactions, establishing a seamless connection between Nigeria’s dynamic economy and international markets while enhancing efficiency in both domestic and global financial interactions.
What the cNGN Offers Users
The cNGN stablecoin is set to provide users with an opportunity to explore the world and engage with the global marketplace in a seamless and cost-effective manner, all while using the familiar Naira.
Users of cNGN will be able to pay for anything, anywhere, and at any time, eliminating traditional challenges associated with currency conversion and hefty international transaction fees. The consortium envisions a future where cNGN acts as a global bridge, simplifying cross-border transactions and providing users with the convenience of paying in Naira.
Use Cases of cNGN
The consortium outlines various use cases for the cNGN stablecoin, including:
- Effortless Remittances: Sending money home becomes as simple as sending a text message, with funds landing directly in recipients’ wallets within seconds.
- Cost-Effective International Trade: Cut out the red tape and high fees associated with traditional international trade, allowing users to send and receive payments globally.
- Instant Freelancing: Freelancers can receive payments from clients worldwide, directly deposited into their cNGN wallets in minutes.
Nigerian banks and fintechs collaborate in the development and management of the cNGN. Similar to well-known stablecoins like USDT and USDC, the cNGN will be compatible with multiple public blockchains, enabling straightforward international transfers and expanding its global use.
Unlike the eNaira, solely developed by the apex bank, the cNGN is a consortium-driven stablecoin, compliant, and regulated, with its value pegged to the Naira in the Reserve Bank account. The collaborative effort aims to bring a dynamic and versatile stablecoin to the forefront of Nigeria’s financial landscape.