Will you buy the cNGN?

The cNGN, Nigeria’s first Naira-backed stablecoin, has many use cases. The most obvious and important one is that it provides a low-cost way for remittances and cross-border transfers. Recently, there’s been a lot of hype around stablecoins, and Nigeria is one of the countries leading the charge. 

The launch of cNGN appears well-timed. Interest in cryptocurrency and stablecoins is growing in Nigeria, though current trading volume is primarily driven by a small group of knowledgeable traders and businesses seeking protection against foreign exchange shortages.

This raises questions about adoption by average Nigerians lacking the same level of knowledge or trust in digital currencies. Factors like high inflation, currency instability, and general trust issues could hinder wider acceptance.

Yet, the cNGN is an exciting prospect. Developed by the African Stablecoin Consortium (ASC)—a group of fintechs, banks, and blockchain companies—cNGN is pegged 1:1 to the Naira. Unlike the government-backed eNaira, this private-sector stablecoin aims to make the Naira more competitive in the digital asset economy, especially against popular USD-pegged stablecoins like USDT and USDC.

For Nigerians, cNGN could be a game-changer. It offers cheaper transfer fees compared to USDT on Ethereum, which is a big deal for a country where remittances are a major part of the economy. 

Once the Naira-backed stablecoin is fully integrated on all blockchain networks, and completes rollout, it is expected to start trading on-chain. On-chain trading will open up the cNGN to list on more platforms and exchanges, giving it more use cases for Nigerians to benefit from the compliant stablecoin.

For example, once Nigeria’s Securities and Exchange Commission (SEC) issues more provisional licences as part of its Accelerated Regulatory Incubation Programme (ARIP), it will empower more local and foreign exchanges to list the stablecoin. For now, it’s only available on Busha, though exchanges like Quidax might list it soon.

The cNGN launch is a big step for Nigeria’s crypto space, and if it sees more utility, it could change how Nigerians move money digitally—the compliant way.