Nigerian Banks Set to Develop New Crypto as CBN Sets New Guidelines on Digital Assets, Penalty
The Central Bank of Nigeria (CBN) has developed a guideline for cryptocurrency trading by Nigerian banks
The development comes as a consortium of Nigerian banks and fintech firms partner to develop a new stablecoin
The new stablecoin, cNGN, is backed by the Nigerian currency and designed to benefit token holders.
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
Following the lifting of the ban on Cryptocurrency trading in Nigeria by the Central Bank of Nigeria (CBN), Nigerian banks and financial technology companies are partnering to develop and manage a new stablecoin, cNGN, designed to benefit token holders and the Nigerian economy.
According to sources, about eight commercial banks are working to develop the new cryptocurrency following the sluggish growth and adoption of the CBN's eNaira.
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eNaira failure leads new crypto development
The identities of the financial institutions are currently being kept secret as they work on the modality to finetune the new coin before launching.
Experts believe that the move prompted the apex bank to issue new guidelines on the country's digital assets operations.
The new cNGN will be pegged to the Naira at a 1:1 ratio and will be officially announced when it is launched in 2024.
Like the famous stablecoins such as USDT and USDC, the soon-to-be-launched cNGN will be consistent with many blockchains, allowing straightforward international transfers and growing its use globally.
The new coin will enable global adoption
According to reports, adapting the functionality of stablecoins, cNGN has interoperable features with other public blockchains, enabling hassle-free global transfers and extending its use beyond Nigeria.
The new stablecoin complies with and is regulated by a consortium, and the stablecoin is pegged to the Naira in the Reserve Bank Account.
Unlike the eNaira, which the Central Bank of Nigeria (CBN) solely developed, the cNGN is fully backed by a consortium.
Nigerian banks partner to fund new crypto
Notable banks in Nigeria will partner with financial technology companies to develop the new stablecoin, which marks a remarkable partnership in the financial industry.
The new cryptocurrency will be compatible with public blockchains like Bantu, Polygon, Ethereum, Binance Smart Chain, and Tron.
The scheme is driven by significant blockchain tech firms, fintech, and some Nigerian banks that serve as licensed holders for the NGN.
In a newly released guideline for virtual assets by the apex bank, the CBN asks organizations and traders to open accounts with Nigerian banks.
CBN instructs Access, UBA, Zenith, and others on crypto bank accounts, stops cash withdrawals
Legit.ng reported that the Central Bank of Nigeria has banned cash withdrawals from virtual and digital asset transactions.
This was disclosed in a new document posted on the CBN website titled 'Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers.'
According to the apex bank, an account opened for virtual assets will only be used for transactions involving virtual/digital assets and not for any other purpose.
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Source: Legit.ng
