The Central Bank of Nigeria (CBN) has approved the Africa Stablecoin Consortium (ASC) to pilot the cNGN stablecoin in its regulatory sandbox.
The new cNGN stablecoin will launch on February 27, 2024.
Driving The News
In a blog post, the ASC — a collaboration of Nigerian banks and fintech operators — said the cNGN stablecoin complies with the regulatory requirements and standards set by the CBN, the Nigerian Securities and Exchange Commission, and the Nigerian Financial Intelligence Unit.
The group said it is engaging with the regulators to ensure compliance, consumer protection, and transparency.
Digging Deeper
The cNGN serves as a complement, not a substitute, for the eNaira, which is the central bank digital currency (CBDC) issued by the CBN.
Unlike the eNaira, which the CBN created with broader capabilities, the ASC oversees the cNGN. The stablecoin is currently interoperable with strategic blockchains like Bantu and BNB Smart Chain, with plans to extend compatibility to all major blockchain networks soon.
How It Works
According to the blog post, the cNGN token is pegged 1:1 to the Nigerian naira, the country’s fiat currency, and is backed by Naira reserves held in designated commercial banks.
The cNGN aims to help Nigerians abroad send money to their families in Nigeria without waiting for remittances to go through. It also aims to eliminate the expensive fees associated with traditional international transactions.
Source: Cointelegraph
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