Last week, CBN decided to lift the ban that prohibits Nigerian banks from carrying out cryptocurrency transaction. Now, the same commercial banks are reportedly working on developing a stable coin dubbed has cNGN following the liftig of the ban.
According to report, commercial banks like First Bank, Access Bank, Sterling Bank, and Providus Bank; payment infrastructures like Kora (formerly Korapay), Interswitch, and Budpay; and Blockchain consultants like Interstellar (Blockchain infrastructure company) and Convexity (Blockchain consultants) are the key partners, expected to execute the project.
cNGN token will maintain a one-to-one peg with every Naira (₦1) held by all banks in the country. It will have the same functionality of major stablecoins like Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), the cNGN token will have interoperability capabilities with other public blockchains.
This move is expected to will allow the token to expand its utility beyond Nigeria by seamlessly facilitating global transactions.
What are Stablecoins?
Stable coins are cryptocurrencies with values tied to those of an existing fiat currency, commodity, or financial instrument (contracts for monetary assets that can be created, bought, traded, modified, or settled for).
Why cNGN When There’s eNaira?
It would be recalled that eNaira was introduced by CBN after it placed ban on cryptocurrency activities. The eNaira is a Central Bank Digital Currency (CBDC) distinct from the cNGN stablecoin. The general thought was that the eNaira was expected to play the role of the cNGN token, but it didn’t.
According to reports, the cNGN stablecoin will be unveiled in January 2024 if everything goes according to plan. We await more information on this development.