Nigeria’s top banks collaborate on new cNGN stablecoin

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Nigerian banks are collaborating to create and oversee a new stablecoin, the cNGN, which is a novel digital currency designed to bring advantages to both tokenholders and the Nigerian economy.

According to sources from within the project who prefer to remain anonymous, the cNGN token is backed by and pegged to the Nigerian naira, the country’s fiat currency.

Like popular stablecoins, the cNGN offers interoperability with various public blockchains, facilitating effortless global transfers and broadening its use internationally.

Partners in the cNGN initiative comprise Access Bank, Sterling Bank, Providus, Korapay, First Bank, Interstellar, Interswitch, Budpay and Convexity.

“cNGN is a compliant and regulated consortium-backed stablecoin that we have been advocating. It maintains a peg to the Naira in a reserve bank account.”

Unlike the eNaira central bank digital currency, the new stablecoin is developed on public blockchains (Bantu, Polygon, Ethereum, BNB Smart Chain and Tron). It is driven by leading blockchain tech and fintech companies, with large banks acting as licensed custodians.

Related: Nigeria’s central bank loosens rules for banks facilitating crypto transactions

The cNGN serves as a complement, not a substitute, for the eNaira. Unlike the eNaira, created by the Central Bank of Nigeria (CBN) with broader capabilities, the cNGN is overseen by a consortium involving Nigerian banks.

According to the sources, the CBN allowed Nigerian banks primarily because it wants the financial system to support and facilitate blockchain technology despite the Nigerian Securities and Exchange Commission’s cumbersome process required to offer digital services.

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