Startup Lagos

25-Feb-2025

Fresh News

Nigerian crypto startup Busha lists cNGN, a consortium-led Naira stablecoin, plans rollout in phases 2 months ago

Busha, a Nigerian cryptocurrency exchange that received a provisional license from the Securities and Exchange Commission (SEC) in August 2024, has officially listed the compliant Nigerian Naira stablecoin (cNGN) on its platform. This launch marks the introduction of Nigeria's first private consortium-backed stablecoin, pegged 1:1 to the Naira.

On February 3, Busha announced the listing of cNGN, allowing users to buy and sell the stablecoin directly on the platform, as Busha manages its own liquidity. However, at this stage, users are unable to transfer cNGN to third-party wallets or decentralized exchanges, which limits its use cases during this initial rollout phase.

"We are excited to announce that cNGN (Compliant Nigerian Naira), the private-sector stablecoin poised to transform Nigeria's digital economy, is now available on Busha," the startup shared on the social media platform X.

Unlike the government-backed eNaira, launched by the Central Bank of Nigeria (CBN) in 2021, cNGN operates independently. Its development was approved by the SEC as part of its Regulatory Incubatory (RI) programme, which aims to regulate the Nigerian crypto sector. The SEC granted approval to a business entity called Wrapped CBDC Ltd., a joint venture with Convexity, which is spearheading the cNGN initiative.

The private consortium behind cNGN comprises a diverse group of banks, fintechs, and tech consulting firms, including Convexity, Alpha Geek Technologies, Digital Currency Coalition, and Interstellar, all collaborating under the African Stablecoin Consortium (ASC).

Although the cNGN officially launched in 2025, discussions regarding the stablecoin began three years earlier, driven by the need to enhance the competitiveness of the Naira against popular USD-pegged stablecoins like Tether (USDT) and USD Coin (USDC). With broader adoption, cNGN aims to increase demand for the local currency, potentially bolstering its value in the foreign exchange market.

cNGN is built on the Bantu blockchain, a layer-1 network, and is designed to function across multiple protocols, including Binance Smart Chain, Base, Ethereum, Polygon, and Assetchain. Currently, it is fully integrated only on Binance Smart Chain (BEP-20) and Base, allowing users to transfer cNGN between wallets on the Base network. However, since the stablecoin is not yet trading on-chain, this limits its potential for widespread adoption.

The cNGN project has faced several challenges, including delays in its launch, stalled partnership negotiations, and the necessity to align with SEC regulations. In a January 8 press release, the ASC announced an indefinite postponement of the cNGN launch, citing ongoing engagement with regulatory bodies. Consequently, the stablecoin's launch a few weeks later came as a surprise.

While Nigerians can now purchase cNGN on Busha, Quidax, another crypto startup that also received a provisional license in August 2024, has yet to list the stablecoin on its platform.

Busha maintains that it listed cNGN due to its compliant nature, aligning with the RI programme established by the SEC. "The SEC has made it clear that digital asset issuers and exchanges must operate within a structured regulatory framework, which cNGN adheres to," said Ngozi Okonye, Busha's Marketing Manager. "We have maintained an open dialogue with regulators to ensure that our listing aligns with existing policies and broader financial system objectives."

Before listing any token, Busha follows a rigorous asset listing protocol, ensuring sufficient liquidity, compliance with applicable regulations, and proper documentation of the project's operational framework. "Before listing cNGN, we conducted due diligence on its issuance model, compliance setup, and reserve management structure," Okonye added.

Crypto startups wishing to list cNGN can utilize API calls to access contract addresses, check balances, process transactions, and integrate cNGN payments into their platforms.

Currently, the cNGN website indicates a limited supply of only 4,400 coins in circulation, which could impact trading dynamics. However, Busha asserts that it maintains its own liquidity pool for cNGN, allowing it to control trading speed and order execution on its platform. "Busha is able to mint and burn cNGN as needed. We maintain cNGN liquidity to meet customer needs, and there are no limits to how much cNGN users can buy or sell at a time, aside from account limits based on verification levels," Okonye explained.

While the stablecoin offers promising use cases, particularly in remittances, its adoption will largely depend on user awareness and education. A Web3 policy consultant, who chose to remain anonymous, noted that the timing of the cNGN launch could have been better, given the current economic climate marked by inflation and currency instability.

Despite these challenges, the future of cNGN may improve significantly once it begins trading on-chain. Such a development could facilitate listings on major foreign crypto exchanges, including Binance, which previously delisted the Naira. This would enable Nigerians to trade the stablecoin through peer-to-peer (P2P) platforms.

However, the SEC's close oversight of the project suggests that the regulator will have the final say on which platforms can list cNGN. This cautious approach explains why Busha is currently the only exchange trading the stablecoin, as the SEC aims to minimize risks associated with its rollout.

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