cNGN is Nigeria’s stablecoin, designed to maintain a fixed value for practical uses like payments, remittances, and trading. Unlike volatile cryptocurrencies such as Bitcoin, stablecoins like cNGN offer stability, allowing for swift and low-cost transactions powered by blockchain technology.
The stablecoin is minted when naira deposits are made into a reserve, ensuring new tokens are fully backed by these deposits. The reserves are composed of bank balances, government bonds, and treasury bills. cNGN is launching on several blockchains, including Ethereum, Binance, and Polygon, with Bantu serving as the primary platform for issuance.
Unlike Nigeria’s e-naira, which is controlled by the Central Bank of Nigeria (CBN), cNGN is privately managed by WrappedCBDC Ltd. within a decentralized financial framework. This offers more flexibility and easier integration globally, as it does not require extensive KYC processes to use.
cNGN has significant benefits for businesses, including quicker payment settlements, lower transaction fees, and enhancing financial inclusion by onboarding the unbanked population. It also reduces dependence on the U.S. dollar, offering a more stable alternative for Nigerian traders and crypto users.
Initially planned for launch in February 2024, cNGN faced delays for regulatory compliance. It was included in Nigeria’s Securities and Exchange Commission (SEC) Regulatory Incubation Program in August 2024. This allows for close monitoring and ensures it meets necessary regulations, placing cNGN among other naira-backed stablecoins such as NGNT and ABCD.
SOURCE: BUSINESS DAY