Nigerian Banks, Fintechs Gear up For February 27 Stablecoin Launch

By Adedapo Adesanya 

All is now set for the launch of the country’s stablecoin, cNGN, on Tuesday, February 17, 2024, as confirmed by the Central Bank of Nigeria (CBN).

The launch is coming after the lifting of the suspension of a two-year prohibition on cryptocurrency trading using official channels by the apex bank.

Business Post reports that the new stablecoin is being developed by a consortium of Nigerian banks, fintechs, and blockchain companies and will be compliant with rules set by the stakeholders and regulated Naira stablecoin.

cNGN will be pegged 1:1 to the Nigerian Naira, but unlike previous stablecoin drafts, it will be owned by Nigerian banks and will be legal tender.

The stablecoin will be an official cryptocurrency and not a digital currency, like the Central Bank Digital Currency (CBDC), the eNaira, launched by the CBN in October 2021 under the governorship of Mr Godwin Emefiele in the Muhammadu Buhari administration.

The coin will have similar use targets like the eNaira which was touted will boost remittance inflow, facilitate border trade, and increase financial inclusion.

The country will be hoping the cNGN does not follow the same route as the eNaira which has not reached its potential with only one in every 200 Nigerian citizens using it.

Proponents say the cNGN will be an improvement on the eNaira because commercial banks co-created it rather than the CBN, as is the case with the CBDC.

However, critics say the currency will follow the same pathway as the eNaira due to the dwindling financial capacity of Nigerians.