Ten things to know about cNGN, Nigeria’s stablecoin

cNGN is Nigeria’s stablecoin, designed to maintain a fixed value, making it practical for payments, remittances, and trading. Unlike traditional cryptocurrencies like Bitcoin, which experience drastic price fluctuations, stablecoins like cNGN operate with stability, ensuring swift and low-cost transactions via blockchain technology.

Here are 10 things to know about Nigeria’s stablecoin:

How cNGN is created

cNGN is minted when the naira is deposited into the cNGN reserve. New tokens are issued only when backed by naira deposits. The cNGN website notes that the reserves will be a mix of bank balances, naira bills, Government bonds, and treasury bonds.

For a new stablecoin, it is launching on quite a few blockchains: Assetchain, Bantu, Base, Binance, Ethereum, Polygon, and TRON. Bantu is the primary blockchain for issuance with a balance of Naira 66 million ($44,000) across them all.

It is a cryptocurrency

Unlike the e-naira, cNGN is a cryptocurrency. Anyone can go to cNGN block explorer and see the transactions that are going on there. People can integrate them outside of the shores of this country and they are not required to do elaborate KYCs to use the CBDC that is issued by the Central Bank of Nigeria.

It is privately managed

cNGN is a privately managed stablecoin that operates within a decentralised financial framework while adhering to regulatory standards, unlike the eNaira which is issued and controlled by the CBN.

Read also: What cNGN, Nigeria’s stablecoin, means for crypto adoption

cNGN is different from e-naira

cNGN and eNaira are different. cNGN is a privately issued stablecoin by WrappedCBDC Ltd., regulated by the SEC. In contrast, eNaira is a central bank digital currency (CBDC) issued by the Central Bank of Nigeria (CBN) that operates on a private blockchain.

cNGN is available already

According to reports over 66.1 million cNGN has been minted, held by 20 wallet addresses, with 74 on-chain transactions recorded. Currently, cNGN is only available on one cryptocurrency exchange — Busha. Expanding its adoption will require increased education and publicity.

cNGN reduces dependence on USD

cNGN will reduce the dependence on USD as a secure asset for pulling investment in the digital world because that on its own can reduce pressure on the USD, as far as Nigerian traders and players in the crypto industry are concerned.

It has benefits for businesses

Businesses stand to gain from quicker payment settlements, lower transaction fees, and enhanced financial inclusion. cNGN could support a more seamless financial ecosystem by reducing inefficiencies in traditional banking processes.

It will improve financial inclusion

cNGN will help onboard the unbanked population, thereby achieving greater financial inclusion. It will also enable businesses to integrate with crypto firms that support cNGN as a currency rather than relying solely on traditional payment channels

It should have launched since last year

cNGN was supposed to have launched in February 2024. However, it was delayed to meet regulatory requirements. In August 2024, it was admitted into Nigeria’s Securities and Exchange Commission (SEC) Regulatory Incubation Program. This program allows the SEC to assess the real-world operations of crypto and blockchain projects under close supervision. As a result, cNGN is recognised as a regulated stablecoin.

It is not the only naira-backed stablecoin

cNGN is not the first or only naira-backed stablecoin. NGNT was launched by the Token Mint consortium in 2019, enabling transactions on Ethereum and Binance Smart Chain with a 1:1 naira peg. That same year, ABCD (Africa Stable-Coin) was introduced by Bitsika to provide a stable digital asset for Nigerians and other Africans.