cNGN Stablecoin: Scrutiny and Questions Arise for Nigeria’s Pioneering Digital Currency
Africa’s burgeoning Web3 ecosystem is watching closely as the cNGN stablecoin project, positioned as Nigeria’s first regulated stablecoin, gains momentum. While attracting praise and investment, including backing from the Riyadh-based venture capital firm Adaverse, the cNGN is also facing critical questions and scrutiny regarding its structure and long-term impact. This emerging digital currency, managed by WrappedCBDC Ltd, is at the forefront of a rapidly evolving financial landscape.
Concerns and Criticisms of cNGN
The cNGN received its Approval-in-Principle (AIP) in 2024 from the Securities and Exchange Commission (SEC) under the Accelerated Regulatory Incubation Program (ARIP). This regulatory green light has paved the way for increased adoption. Nigerian exchanges, such as Busha and Quidax, have already recognized the cNGN, indicating growing integration into the local financial system. Furthermore, platforms like Xend Finance have contributed to its financialization. However, the integration of the cNGN into the decentralized finance (DeFi) space also raises concerns. Xend Finance’s involvement transforms the cNGN into a yield-generating instrument, blurring the lines between its primary function as a stable store of value and speculative activities. The Limit to save tokens function has also raised some concerns. These questions have focused on ensuring the stability of the cNGN and its effectiveness as a means of exchange within the Nigerian economic context.
The cNGN project represents a significant step forward for Nigeria’s digital economy, but it is important that these emerging issues are addressed.
Keywords
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