Adedapo Adesanya
By Adedapo Adesanya
Nigeria is reportedly developing its first regulated Naira stablecoin called cNGN following the suspension of a two-year prohibition on cryptocurrency trading using official channels.
The new stablecoin cNGN 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.
According to Forbes, the launch is planned for 2024, citing sources.
However, unlike in previous versions, cNGN will be a cryptocurrency — like other stablecoins — and not a digital currency.
Also, the coin will be serviced by the consortium and owned by its banks.
This development came after the Central Bank of Nigeria (CBN) lifted the ban placed on transactions with cryptocurrencies last week. This will allow people to buy and sell USDT in Nigeria.
The central bank under the governorship of Mr Godwin Emefiele in February 2021 prohibited credit institutions from conducting cryptocurrency-related transactions. This affected many cryptocurrency startups, which had to remodel their product offerings.
The lifting of the ban stems from the understanding that cryptocurrencies play an important role in global financial systems and their use in Nigeria is inevitable, which is one of the fastest adopters of the currency.
Nigeria has already made several attempts to transition to a digital currency. In 2012, Nigeria introduced its cashless policy on the premise that moving away from cash would make its payment system more efficient, reduce the cost of banking services, and improve the effectiveness of monetary policy.
In October 2021, the Muhammadu Buhari-led administration launched a Central Bank Digital Currency (CBDC) called eNaira.
However, the adoption rate of the eNaira, has been low since its launch on October 25, 2021.
The coin had been touted to reduce the fiat and cash dependency of Nigerians and also bring many into the financial inclusion plan of the country where nearly 40 million people in the country don’t have a bank account.
The CBN has struggled to convince citizens to use CBDC, launching several campaigns but the digital currency has attracted only one in 200 citizens.
