Consortium of Nigerian Banks and Fintechs Cleared to Pilot Stablecoin

The Nigerian central bank has given its go-ahead for the Africa Stablecoin Consortium (ASC) to pilot its cNGN stablecoin initiative in the financial regulator’s regulatory sandbox. The ASC asserts that the cNGN stablecoin can prove to be vital not only for the country’s payment rails but for the CBN’s digital currency as well.

ASC’s Stablecoin Set to Go Live in Late February

The Central Bank of Nigeria (CBN) has given the green light for the Nigerian banks, fintech, and blockchain experts consortium, known as the Africa Stablecoin Consortium (ASC), to pilot the cNGN stablecoin initiative in its regulatory sandbox. According to the consortium, the cNGN is scheduled to go live on Feb. 27, 2024.

Described as the compliant Nigerian naira stablecoin, the cNGN, which is backed 1:1 by reserves denominated in local currency, is expected to become the preferred tool for worldwide remittances, trade, and investment, the ASC said. The CBN’s approval reportedly came just as it lifted the Feb. 5, 2021 crypto prohibition order.

The greenlighting of the stablecoin project came at a time when the CBN’s digital currency — the e-naira — continues to stutter despite the central bank’s attempts to shore up the project. The naira depreciation, which has continued even after the currency’s devaluation, has compounded matters.

Complimenting Nigeria’s Payment Rails

However, the ASC asserts that the cNGN stablecoin can prove to be vital not only for the country’s payment rails but for the CBN’s digital currency as well.

“This move complements the enhanced capabilities of the country’s payment rails and paves the way for further advancements in CBDC [central bank digital currency] utilization, regulatory sandbox frameworks, and API [application programming interface] & open banking,” the ASC explained in the statement.

The consortium also claimed that through cNGN stablecoin, Nigerians will be able to perform instantaneous financial transactions. In addition, the stablecoin will seamlessly connect Nigeria’s vibrant economy with international markets, which in turn brings about “unprecedented efficiency in both domestic and global financial interactions.”

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