The Central Bank of Nigeria (CBN) has approved the Africa Stablecoin Consortium (ASC) to pilot cNGN stablecoin in its regulatory sandbox. The new stablecoin is to be launched on Feb. 27, 2024.
In a blog post, the Africa Stablecoin Consortium, a collaboration 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 (SEC) and the Nigerian Financial Intelligence Unit (NFIU).
The group said it is engaging with the regulators to ensure compliance, consumer protection, and transparency.
The cNGN serves as a complement, not a substitute, for the eNaira. Unlike the eNaira, which the CBN created with broader capabilities, the Africa Stablecoin Consortium oversees the cNGN.
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The cNGN is currently interoperable with strategic blockchains like Bantu and BNB Smart Chain, with plans to extend compatibility to all major blockchain networks soon.
According to the publication, the cNGN token is pegged 1:1 to the Nigerian naira, the country’s fiat currency, and backed by Naira reserves held in designated commercial banks.
The stablecoin aims to bridge the gap between the Nigerian Naira and digital currencies in the global market through blockchain technology.
The cNGN aims to help Nigerians abroad send money to their families in Nigeria without waiting for remittances to go through. It also eliminates the expensive fees associated with traditional international transactions.
Unlike the eNaira central bank digital currency, the new stablecoin is developed on public blockchains (Bantu, Polygon, Ethereum, BNB Smart Chain and Tron).
Like other established stablecoins, the cNGN offers interoperability with various public blockchains, facilitating global transfers and broadening its use internationally.
According to the blog, the CBN wants the financial system to support and facilitate blockchain technology.
In a circular sent to banks on Dec. 22, the CBN recognized the increasing global demand and adoption of crypto and lifted restrictions on Nigerian banks facilitating cryptocurrency transactions.
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