Busha, a Nigerian cryptocurrency exchange that obtained a provisional license from the country’s Securities and Exchange Commission (SEC) in August 2024, has introduced the compliant NGN (cNGN) stablecoin on its platform. This development marks the launch of Nigeria’s first private consortium-backed stablecoin, pegged at a ratio of 1:1 to the Naira.
On February 3, Busha announced the listing of cNGN, allowing users to purchase and redeem the stablecoin directly on the platform, as Busha manages its own liquidity. Currently, users cannot transfer cNGN to external wallets or decentralized exchanges, limiting its applications during this initial rollout phase.
The cNGN is a private-sector initiative distinct from the Central Bank of Nigeria’s (CBN) eNaira, launched in 2021. Its creation was facilitated by the SEC, which approved the stablecoin as part of its Regulatory Incubatory (RI) program in August 2024, granting an approval in principle to “Wrapped CBDC Ltd.” This entity, registered in 2023, collaborates with Convexity to advance the cNGN project.
The consortium driving the cNGN includes banks, fintech companies, and blockchain advocacy and consulting firms such as Convexity, Alpha Geek Technologies, Digital Currency Coalition, and Interstellar, operating collectively under the African Stablecoin Consortium (ASC).
Discussions about creating a stablecoin began three years ago, aiming to strengthen the Naira against widely traded USD-pegged stablecoins like Tether (USDT) and USD Coin (USDC). With broader adoption, the cNGN could increase demand for the local currency, potentially enhancing its value in the foreign exchange market.
Built on the Bantu blockchain—a layer-1 network—the cNGN is designed for compatibility across multiple protocols, including Binance Smart Chain, Base, Ethereum, Polygon, and Assetchain, as noted by Adedeji Owonibi, founder of Convexity.
Currently, the stablecoin is fully integrated on Binance Smart Chain (BEP-20) and Base, a layer-2 blockchain, enabling users to transfer cNGN between wallets on the Base network. However, its accessibility is limited to Busha’s platform, hindering widespread adoption.
Since its inception, the cNGN project has encountered challenges, including launch delays, stalled partnership negotiations, and the need to align with SEC regulations. In a January 8 press release, the ASC postponed the cNGN launch indefinitely, citing ongoing engagements with regulatory bodies. Therefore, the stablecoin’s launch shortly thereafter was unexpected.
Busha stated that it listed the cNGN due to its compliance with the SEC’s RI program. The company follows a strict asset listing protocol, requiring projects to demonstrate sufficient liquidity, regulatory compliance, and proper documentation.
Before listing cNGN, Busha conducted due diligence on its issuance model, compliance framework, and reserve management structure. The company maintains its own cNGN liquidity pool, allowing it to control trading speed and order execution on its platform. Users can mint and burn cNGN as needed, with no specific limits on transactions beyond standard account verification levels.
The cNGN has various potential applications, including remittances, where its integration with multiple blockchain networks offers low-cost options compared to USDC or Tether. For instance, sending the equivalent of ₦150,000 in cNGN incurs a fee of about ₦150–₦500, making it an attractive alternative.
However, adoption will depend on awareness and education efforts. Challenges include the Naira’s weak reserves, inflation, currency instability, and low public trust, which may deter individuals from holding the stablecoin as a store of value.
The stablecoin’s prospects could improve once it begins trading on-chain, potentially leading to listings on major foreign crypto exchanges. However, the SEC’s oversight will likely influence which platforms can list the stablecoin, explaining why only Busha is currently trading it.
