Central Bank of Nigeria approves cNGN stablecoin to pilot in February amid CBDC woes

The Central Bank of Nigeria (CBN) has approved the Africa Stablecoin Consortium to pilot the cNGN stablecoin within its Regulatory Sandbox.

This initiative marks a key moment in the evolution of financial developments in the country. The ASC brings together a group of leading financial institutions, fintech innovators, and blockchain specialists, aiming to redefine and enhance the security and compliance of financial interactions.

The cNGN is a regulatory-compliant stablecoin pegged to the Nigerian Naira and backed by Naira reserves in selected commercial banks. Its launch is scheduled for Feb. 27, 2024. The stablecoin aims to facilitate rapid and cost-effective global remittances, streamline commerce and trade, and open new investment avenues. Its introduction is envisioned to transform the Naira into a more dynamic tool for international financial exchanges.

In a notable precursor to the cNGN initiative, ZeroHedge reported back in May 2023 that the CBN introduction of the eNaira CBDC in 2021 faced significant public resistance. Aimed at transitioning the country towards a cashless society, the eNaira rollout saw less than 0.5% adoption by the public a year later. The CBN’s subsequent forceful measures, including the rapid demonetization of paper currency and strict limits on cash withdrawals, sparked nationwide protests and heightened distrust in digital currencies.

cNGN stablecoin launch.

A key feature of the cNGN is its potential to simplify international transactions, reducing the complexities and costs associated with currency conversion and international transfer fees. The ASC believes this aspect is particularly beneficial for remittances, something it states is a crucial financial flow for many Nigerian families. The cNGN promises to make these transactions almost instantaneous, mirroring the ease and speed of sending a text message.

Furthermore, the cNGN is positioned to impact international trade by enabling swift and cost-effective business transactions across borders. The goal is reportedly to enhance Nigeria’s participation in the global economy, allowing for more efficient and immediate trade interactions.

For Nigerian freelancers and entrepreneurs, the cNGN purportedly has the potential to enable them to receive payments from international clients directly and quickly, circumventing traditional banking processes and fees. The ASC believes this capability could lead to greater financial inclusivity and mobility for Nigerian professionals,…