After CBN’s action, Nigerian banks, Fintech firms partner to develop new crypto

Following the lifting of the ban on Cryptocurrency trading in Nigeria by the Central Bank of Nigeria (CBN), Nigerian banks and financial technology companies are partnering to develop and manage a new stablecoin, cNGN, designed to benefit token holders and the Nigerian economy.

The new cNGN will be pegged to the Naira at a 1:1 ratio and will be officially announced when it is launched in 2024.

Like the famous stablecoins such as USDT and USDC, the soon-to-be-launched cNGN will be consistent with many blockchains, allowing straightforward international transfers and growing its use globally.

According to reports, adapting the functionality of stablecoins, cNGN has interoperable features with other public blockchains, enabling hassle-free global transfers and extending its use beyond Nigeria.

The new stablecoin complies with and is regulated by a consortium, and the stablecoin is pegged to the Naira in the Reserve Bank Account.

Unlike the eNaira, which the Central Bank of Nigeria (CBN) solely developed, the cNGN is fully backed by a consortium. Notable banks in Nigeria will partner with financial technology companies to develop the new stablecoin, which marks a remarkable partnership in the financial industry.

The new cryptocurrency will be compatible with public blockchains like Bantu, Polygon, Ethereum, Binance Smart Chain, and Tron.

The scheme is driven by significant blockchain tech firms, fintech, and some Nigerian banks which serve as licensed holders for the cNGN.

In a newly released guideline for virtual assets by the apex bank, the CBN asks organizations and traders to open accounts with Nigerian banks.