In a groundbreaking move set to transform Nigeria’s financial landscape, the Africa Stablecoin Consortium (ASC) has announced the imminent launch of the compliant Nigeria Naira (cNGN) stablecoin on February 27, 2024. This initiative brings together a coalition of Nigerian financial institutions, fintechs, and blockchain experts poised to revolutionize the country’s economic interactions.
The ASC made the pivotal announcement in a statement released last Friday, highlighting the cNGN’s launch as riding on the recent release of the Regulatory Sandbox by the Central Bank of Nigeria (CBN). This milestone marks a significant stride towards leveraging blockchain technology for enhanced financial transactions while ensuring compliance with regulatory frameworks.
The consortium expressed its vision for the cNGN, emphasizing its role in redefining financial interactions securely and seamlessly. They noted that the stablecoin is backed 1:1 by Naira reserves held in designated commercial banks, essentially transforming the Nigerian Naira into a dynamic instrument for global transactions.
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“This (the cNGN) ushers in a new era of financial fluidity, bridging the Nigerian Naira with the global market through blockchain technology,” the ASC stated. They highlighted its potential to expedite settlements globally at minimal costs, mirroring the speed of text messages and offering unparalleled efficiency in both domestic and international financial transactions.
“More than just a currency, cNGN shortens settlement times, enabling payments that traverse the globe swiftly, mirroring the speed of a text message and at a fraction of the cost,” it said.
The consortium underlined the diverse utility of the cNGN, emphasizing its capacity to extend financial reach beyond Nigeria’s borders. Users will experience a seamless, cost-effective means to engage with the global marketplace while using their familiar Naira.
According to the ASC, the cNGN’s functionalities encompass various use cases, including swift remittances, enabling instantaneous fund transfers, facilitating international trade with reduced fees, and empowering freelancers to receive payments globally in minutes.
“This breakthrough paves the way for instantaneous financial transactions, seamlessly connecting Nigeria’s vibrant economy with international markets and offering unprecedented efficiency in both domestic and global financial interactions,” the consortium further noted.
This initiative echoes recent collaboration efforts among Nigerian banks and fintech firms to develop and manage the cNGN. It will be interoperable with multiple public blockchains, facilitating straightforward international transfers and widening its global applicability, akin to established stablecoins like USDT and USDC.
“Sending money home feels like sending a text message, effortless and instant: No more agonizing days waiting for remittances to clear. With cNGN, supporting your loved ones back home becomes as simple as a quick tap on your phone. No more standing in lines,” the consortium noted.
“With cNGN, funds land directly in their wallets within seconds, ready to fuel their dreams and brighten their days. No more distance, no more delays, just the magic of compliant virtual assets bridging the gap between hearts.
“Get paid, anywhere, instantly. Ditch the limitations of location and outdated payment systems. With cNGN, you can freelance for the world, right from your desk in Nigeria. Your talent knows no borders, so why should your income? Skip the bank queues and paperwork. Receive payments from clients across the globe, directly deposited into your cNGN wallet in minutes.”
As a distinguishing feature from the eNaira, which is solely developed by the apex bank, the cNGN is a consortium-driven stablecoin, compliant, and regulated. It will be pegged to the Naira in the Reserve Bank account, ensuring stability and oversight by the collective expertise of the consortium.
The ASC’s announcement marks a significant stride towards leveraging blockchain technology to enhance financial inclusion, reduce transactional barriers, and amplify Nigeria’s integration into the evolving global financial industry.
This initiative holds the promise of transforming not only the Nigerian economy but also setting a precedent for blockchain-based financial innovations across the African continent, redefining the future of financial transactions in the region.