Leading Nigerian banks have announced the launch of cNGN, the first-ever stablecoin pegged to the Nigerian Naira. This landmark project emerges just weeks after the Central Bank of Nigeria (CBN) lifted its two-year ban on cryptocurrency transactions, signaling a new era of collaboration and innovation in the country's financial landscape.
Built on a soon-to-be-launched African blockchain platform, cNGN will be directly pegged to the Naira at a one-to-one ratio, with reserves held by participating banks ensuring stability. Similar to established stablecoins like Tether and USD Coin, cNGN will offer the benefits of cryptocurrency – speed, security, and global reach – while mitigating the volatility risks.
"cNGN marks a significant milestone for Nigeria's financial sector," said Dr. Adesola Adedayo, CEO of First Bank, one of the key partners in the project. "By harnessing the power of blockchain technology, we have the potential to unlock new avenues for financial inclusion, cross-border trade, and economic growth."
The cNGN project boasts a consortium of prominent players in the Nigerian financial ecosystem. Alongside leading commercial banks like Access Bank, Sterling Bank, and Providus Bank, payment infrastructure providers Kora, Interswitch, and Budpay are also on board. Blockchain experts Interstellar and Convexity add further expertise to the collaboration.
This partnership signifies a shift from competition to collaboration in the Nigerian financial landscape. The CBN's ban on cryptocurrency transactions in 2021 initially halted cNGN's development. However, acknowledging the need for regulatory oversight and the potential of blockchain technology, the CBN reversed its stance in December 2023, paving the way for innovation.
"The lifting of the ban demonstrates the CBN's commitment to fostering a responsible and innovative financial ecosystem," said Chigozie Iwu, co-founder of Interstellar. "cNGN's interoperability with other blockchains positions Nigeria as a potential leader in the African crypto space."
The launch of cNGN is expected to have a significant impact on the Nigerian economy. By facilitating faster and cheaper cross-border transactions, cNGN can boost foreign direct investment and trade. Additionally, its potential to reach unbanked populations can promote financial inclusion and economic empowerment.
With its focus on collaboration, stability, and global reach, cNGN positions Nigeria at the forefront of Africa's blockchain revolution. As the first stablecoin pegged to an African currency, cNGN has the potential to reshape the continent's financial landscape and unlock new opportunities for economic growth and development.
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