Nigeria Approves cNGN Stablecoin Testing in Regulatory Sandbox

• On February 27, 2024, the new stablecoin will be released.
• The stablecoin is in full compliance with all regulations and standards imposed by the CBN.

The Africa Stablecoin Consortium (ASC) has been granted permission by the Central Bank of Nigeria (CBN) to test the cNGN stablecoin in a regulatory sandbox. On February 27, 2024, the new stablecoin will be released.

Moreover, the cNGN stablecoin is in full compliance with all regulations and standards imposed by the CBN, the Nigerian SEC, and the Nigerian Financial Intelligence Unit, according to a post by the ASC, a partnership of Nigerian banks and fintech businesses. Also, to guarantee transparency, consumer protection, and compliance, the organization said it is interacting with authorities.

Pushing Global Adoption

Furthermore, the central bank digital currency (CBDC) issued by the CBN, the eNaira, and the cNGN work hand in hand. The cNGN is overseen by the ASC, in contrast to the eNaira, which was built by the CBN with more extensive capabilities.

Plans are in the works to expand the stablecoin’s compatibility to all major blockchain networks, however it is already compatible with strategic blockchains such as Bantu and BNB Smart Chain.

The cNGN token is backed by Naira reserves kept in selected commercial banks and is tied 1:1 to the Nigerian naira, the country’s fiat currency, according to the blog article.

Without having to wait for remittances to clear, the cNGN would allow Nigerians living abroad to transfer money to their loved ones back home. Additionally, it seeks to do away with the high costs connected with conventional cross-border transactions.

The article claims that the CBN is pushing for blockchain technology to be supported and enabled by the financial system. Nigerian banks are now free to process cryptocurrency transactions according to a circular handed out by the Central Bank of Nigeria (CBN) on December 22, 2023. 

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