Banks and blockchain companies in Nigeria to jointly launch stablecoin pegged to the national currency
The cNGN asset will be recognized as legal tender
28.12.2023 - 09:53
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What’s new? Following a directive from the Central Bank of Nigeria, a consortium of local banks, fintech, and blockchain companies have begun developing the cNGN stablecoin, which is expected to launch next year. The 1:1 asset pegged to the Nigerian naira (NGN) will be recognized as legal tender. The project involves financial institutions First Bank, Access Bank, Sterling Bank, and Providus Bank, payment companies Budpay, Kora, and Interswitch, as well as blockchain companies Convexity and Interstellar.
What else is known? At the moment, the country has already launched the central bank digital currency (CBDC) eNaira. However, unlike the national cryptocurrency, the CBDC will not have direct control over the new cNGN stablecoin.
cNGN will be managed by the consortium’s member banks and regulated by the CB and the Securities and Exchange Commission. The consortium has not yet decided which blockchain will be used to launch the asset.
This month, the Central Bank lifted the ban on cryptocurrency transactions for financial institutions. Earlier, Blockchain com exchange announced its entry into the Nigerian market, while analytics firm Chainalysis ranked the country second in its ranking of cryptocurrency adoption. The Securities and Exchange Commission announced the legalization of asset-backed tokens back in May.
At the same time, since the end of last year, the country has had a cash withdrawal limit imposed to promote eNaira by order of the Central Bank.
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