The Central Bank of Nigeria (CBN) has recently approved the launch of the Nigerian naira (cNGN) stablecoin, scheduled to go live on February 27, 2024.
This stablecoin is powered by the Africa Stablecoin Consortium (ASC), a collaboration involving Nigerian financial institutions, fintechs, and blockchain experts.
Here’s what you need to know about this groundbreaking innovation.
What are cNGN StableCoin?
cNGN tokens are assets pegged 1:1 with the Nigerian Naira and backed 100% by ASC’s reserves. They move across the blockchain easily and offer price stability.
Is cNGN a digital currency?
Yes, cNGN is a digital token on open, permissionless blockchain protocols. It is designed to maintain a stable value, unlike other fluctuating digital assets.
How is cNGN different from other stable coins?
cNGN is similar to other stablecoins but is pegged to the Nigerian Naira. It offers stability like other fiat-pegged stablecoins such as USDC, USDT, and EURC.
Regulatory Compliance
The cNGN has met all regulatory standards set by the Central Bank of Nigeria (CBN), the Nigerian Securities and Exchange Commission (SEC), and the Nigerian Financial Intelligence Unit (NFIU).
What is the value proposition of cNGN?
cNGN aims to bridge the gap between fiat and digital currencies, offering a stable, compliant, fast, secure, transparent, and borderless digital currency.
Is cNGN subject to volatility like other cryptocurrencies?
No, cNGN is not volatile like other cryptocurrencies. It is backed 1:1 with the Nigerian Naira, ensuring a stable value.
How is the value of cNGN maintained?
All cNGN in circulation is fully backed 1:1 with Nigerian Naira reserves, held in designated commercial banks. The mechanism ensures transparency, and a daily record of assets and reserves is published.
Is cNGN the same as eNaira?
No, eNaira is the Central Bank of Nigeria’s Digital Currency (CBDC), while cNGN is a stablecoin created by the Africa Stablecoin Consortium.
How does cNGN contribute to financial inclusion in Nigeria?
cNGN enables Nigerians without access to traditional banking infrastructure to store value, make payments, and access financial services through blockchain-based platforms.
What blockchain protocol is cNGN available on?
cNGN is interoperable with strategic blockchains like Bantu and Binance Smart Chain, with plans to extend compatibility to all major blockchains in the coming months.
Can cNGN be pegged to assets such as gold?
No, cNGN is pegged to the Nigerian Naira. However, it can be swapped/traded for commodities/assets while remaining pegged to the Naira.
Can I convert cNGN and make Naira withdrawals?
Yes, users can convert cNGN and make Naira withdrawals.
Can I use cNGN for everyday transactions?
Yes, cNGN allows users to make daily transactions with transparency, speed, and reduced risk of chargebacks.
Who can use cNGN?
Both businesses and individuals can use cNGN.
How does cNGN comply with Financial Stability Board (FSB) recommendations?
cNGN ensures compliance with FSB Recommendation 9 (Global Stablecoin) by providing a robust legal claim to all users against the underlying reserve assets, guaranteeing timely redemption and maintaining ample reserves for effective stabilization.
