Nigeria Delays Launch Of Its Own Stablecoin, Still Waiting For Green Light From The Central Bank

Nigeria plans to release a stablecoin cNGN. (Photo; Doc. Publichealth)

JAKARTA - Nigeria was forced to delay its plans to launch its own stablecoins in February. Because the consortium, which consists of Nigerian fintech banks and startups, is still awaiting approval from the Central Bank of Nigeria.

Stablecoin Nigeria, called cNGN, is a digital currency whose value is tied to Nigeria's official currency, naira. The stablecoin was developed by the African Stablecoin Consortium (ASC), a group consisting of fintech startups and Nigerian banks, such as Flutterwave, Cowrywise, Kuda Bank, and others.

ASC announced on January 9 that it had received the green light from CBN to launch a cNGN on February 27. ASC claims that cNG will be the first stablecoin to comply with regulations in Africa, and will help accelerate the adoption of central bank digital currencies (CBDC) in Nigeria.

However, on January 15, the ASC issued a new statement stating that the CNGN was being postponed. ASC said it was still communicating with CBN and other regulatory bodies. In addition, ASC must also participate in testing new financial products or services in regulated environments.

"We want to make it clear that cNGN will not be publicly launched on February 27, 2024. We are still communicating with the Central Bank of Nigeria and other regulatory agencies to participate in the regulatory sandbox program," ASC said in its official statement.

ASC added that they are committed to complying with applicable regulations and guidelines. The consortium will only launch cNGN after obtaining related approval. ASC also promised to provide accurate and transparent information to stakeholders.

Nigerian Stablecoin Potentially Pushes For Crypto Adoption

Nigeria's stablecoin, if successfully launched, has the potential to encourage crypto adoption in Nigeria, which is one of the countries with the highest crypto activity in the world. According to a Chainalysis report, Nigeria ranks third in the world in terms of the value of crypto transactions per capita in 2021.

Nigerian stablecoins are also expected to provide benefits to the Nigerian economy, which is experiencing a currency crisis, inflation, and cash scarcity. By using cNGN, Nigerians can carry out cross-border transactions, remittances, and digital payments quickly, cheaply, and safely.

In addition, Nigeria's stablecoins can also be a bridge between fiat and digital assets, as well as support the development of CBDCs in Nigeria. CBN itself has launched eNaira, the official Nigerian CBDC, in October 2021. However, eNaira has not been widely used by the public, because it is still constrained by technical problems, regulations, and education.

According to CoinDesk, cNG will be interoperable with eNaira, as well as with other public blockchain networks, such as Binance Smart Chain and Help Network. Thus, cNGN can facilitate integration between the traditional economy and the digital economy in Nigeria.

However, Nigeria's stablecoin launch still has to wait for approval from CBN and other regulatory agencies. ASC hopes that this process can be completed as soon as possible, so that cNGN can be launched immediately and have a positive impact on Nigeria.