Busha, a Nigerian cryptocurrency exchange, has recently listed the compliant NGN (cNGN) stablecoin on its platform after securing a provisional license from the country’s Securities and Exchange Commission in August 2024. This stablecoin, pegged 1:1 to the Naira, is the first of its kind in Nigeria.
Users of Busha can now buy and sell cNGN on the platform, as the exchange manages its liquidity. However, at this stage, users are unable to send the stablecoin to third-party wallets or decentralized exchanges, limiting its overall utility.
The cNGN stablecoin project, although not government-led like the eNaira, is a product of collaboration with the SEC under the Regulatory Incubatory (RI) program. The stablecoin initiative was approved in August 2024, with “Wrapped CBDC Ltd” being granted an approval in principle to launch the cNGN stablecoin.
The stablecoin, built on the Bantu blockchain, is currently integrated on Binance Smart Chain and Base. Despite facing challenges during its development, the cNGN stablecoin aims to provide a cost-effective remittance option and increase demand for the Naira in the forex market once widely adopted.
Busha ensures compliance by following an asset listing protocol before launching any token on its platform. The exchange maintains its own cNGN liquidity pool to facilitate trading efficiently, although details of reserve management are kept confidential.
Although cNGN adoption might face hurdles due to weak fiat Naira reserves and low trust in the local currency, its prospects could improve with on-chain trading. Busha’s exclusive trading of the stablecoin reflects the SEC’s cautious approach in monitoring the project to mitigate risks effectively.