A Nigerian Consortium Develops Regulated Naira Stablecoin
A group consisting of Nigerian banks, fintechs, and blockchain companies is collaborating to create the first regulated Naira stablecoin called cNGN. This consortium-owned digital currency will be compliant with regulations and pegged 1:1 to the Nigerian Naira (NGN). Unlike previous drafts, cNGN will be considered legal tender and serviced by the consortium’s banks.
Forbes reports that the launch of cNGN is scheduled for 2024. However, there are still details that need clarification, such as the blockchain technology it will utilize and the specific applications and services it will offer to consumers.
“Nevertheless, there are still many unknowns about the cNGN that will need to be clarified by the consortium, such as the blockchain it will use and the planned apps and services for consumers.”
Forbes
Nigeria Lifts Ban on Cryptocurrency Transactions
Just recently, Nigeria reversed its ban on cryptocurrency transactions. The country’s Central Bank had previously prohibited credit institutions from engaging in any crypto-related activities since February 2021. However, this ban has been lifted due to the recognition of cryptocurrencies’ significance in global financial systems and their inevitable role in Nigeria.
Low Adoption of CBDC in Nigeria
Nigeria has made previous attempts to embrace digital currency. In 2012, the country introduced its cashless policy to enhance payment system efficiency, reduce banking service costs, and improve monetary policy effectiveness. However, the adoption rate of its previous central bank digital currency (CBDC) called eNaira has been low since its launch on October 25, 2021. Despite approximately 40 million Nigerians lacking bank accounts, the CBDC has only attracted one in 200 citizens.
Hot Take: Nigeria Ventures into Regulated Stablecoin Territory
A consortium of Nigerian banks, fintechs, and blockchain companies is set to revolutionize the Nigerian financial landscape with the development of cNGN, a regulated Naira stablecoin. This digital currency aims to provide a compliant and secure alternative for Nigerians to transact in their national currency. With the lifting of the cryptocurrency ban and the growing recognition of the importance of digital assets, Nigeria is taking a significant step towards embracing the future of finance. However, as details about cNGN are yet to be fully revealed, there is still anticipation regarding its blockchain technology and consumer-oriented applications.
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