The Africa Stablecoin Consortium (ASC) has been given permission by the Central Bank of Nigeria (CBN) to test the cNGN stablecoin in its regulatory sandbox.On February 27, 2024, the new stablecoin is scheduled to launch.
The Nigerian Securities and Exchange Commission, the Nigerian Financial Intelligence Unit, and the CBN have established regulatory requirements and standards, and the cNGN stablecoin complies with them, according to a blog post by the ASC, a partnership of Nigerian banks and fintech companies.The group stated that in order to guarantee compliance, consumer protection, and transparency, it is interacting with the regulators.The CBN issues the eNaira, which is the central bank digital currency (CBDC), and the cNGN is meant to be used in addition to it.The CBN established the eNaira, which has more capabilities, but the ASC is in charge of the cNGN.With intentions to rapidly expand compatibility to all major blockchain networks, the stablecoin is now compatible with strategic blockchains including Bantu and BNB Smart Chain.
The blog article states that the cNGN token is backed by Naira reserves kept in specific commercial banks and is fixed 1:1 to the Nigerian naira, the nation’s fiat currency.Using blockchain technology, the stablecoin seeks to close the value gap between the naira and other digital currencies on the international market.
The cNGN seeks to facilitate the instantaneous transfer of funds between Nigerians living overseas and their families back home.It also seeks to do away with the costly costs related to conventional international transactions.The blog post states that the CBN desires for blockchain technology to be supported and enabled by the financial sector.The CBN eased limitations on Nigerian banks supporting cryptocurrency transactions in a circular addressed to banks on December 22, 2023, in recognition of the growing demand and usage of cryptocurrencies worldwide.