This article explores how the cNGN stablecoin aims to succeed where Nigeria’s eNaira failed, offering a regulated, transparent digital alternative.
Nigeria’s first attempt at digital currency, the eNaira, failed to gain public trust or adoption due to poor rollout, limited use cases, and centralization. Now, the cNGN stablecoin—a privately issued, blockchain-based token backed 1:1 by the Naira—is offering a more transparent, compliant, and flexible alternative. With support from Nigerian banks and fintechs, cNGN aims to streamline remittances, e-commerce, and financial oversight. Whether it can succeed where the eNaira fell short depends on public trust, regulatory clarity, and real-world integration.
cNGN Stablecoin – In Brief
A Second Shot at Digital Currency: Can cNGN Fix What eNaira Broke?
Nigeria, Africa’s largest economy by GDP is about to enter a new era in the digital finance realm. The traditional currency markets are often riddled with inflation and an evident gap between official and black market rates has pushed the nation to find innovative solutions for payments and cross-border transactions.
While they did try to address the issue previously with central bank digital currency, eNaira didn’t meet the expectations and didn’t gain the intended level of adoption. Now, the cNGN stablecoin is making a buzz, and it appears to have a stronger case and an innovative approach.
The new stable coin has the potential to ease the volatility and affect the future of international payments. Let’s learn more about the situation in-depth in this blog post.
Fall of eNaira: What Went Wrong with Nigeria’s CBDC
Buzz around the launch of eNaira in late 2021 was almost impossible to ignore. It was one of the first African nations to embrace central bank digital currency. The goal was ambitious and the main aim was not only to reduce remittance costs but to digitize the economy. Unfortunately, the public didn’t resonate with eNaira and the rest speaks for itself.
If you are asking yourself, what is eNaira and why didn’t it gain adoption? You are not alone.
eNaira in simple words was a centralized digital token issued and controlled by the Central Bank of Nigeria. Start of the slippery slide was due to lack of interoperability with the existing financial system.
Moreover, the incentives were weak at best for the users and the top-down rollout didn’t engage banks of fintechs effectively. Also, there was a widespread public mistrust and the fears of surveillance and limited use cases all caused significant scarring.
Instances like what happened with eNaira show that the adoption of new technology is directly linked to PR and marketing. Unless the masses join and trust is built, it won’t be a reliable solution.
What is cNGN? Nigeria’s Regulated Stablecoin Explained
cNGN stable coin is short for compliant Nigerian Naira. This initiative is led by the Africa Stablecoin Consortium. The main idea behind this initiative is to build trust along with embracing public-private synergy.
Now, the question you need to ask yourself is – What is cNGN exactly?
The cNGN stable coin is a blockchain based token that is pegged 1:1 with the Nigerian Naira. Unlike the eNaira, this token is built to function across multiple blockchain networks offering better scalability and compatibility with DeFi applications. Simply put, both the traditional and crypto world inspired features are merged and every token is backed by a real Naira ensuring transparency.
Main USP of the cNGN is that it isn’t issued by a central bank, but is managed by a consortium of licensed financial institutions. In a lot of ways, this one has more flexibility while still ensuring compliance with regulatory frameworks.
Tether vs cNGN: Trust, Transparency, and Use Cases
When it comes to stable coins, the conversation always centres around 3 things which are – Trust, transparency and use cases.
Tether(USDT), the world’s most widely used stable coin, is pegged to the U.S. dollar and is popular in the Nigeria currency exchanges. Though Tether looks great on paper, it has its flaws and there are serious concerns over the audits and lack of regulatory clarity. Moreover, it operates outside Nigerian jurisdiction making enforcement difficult.
On the contrary, cNGN stablecoins come under a defined legal framework. It benefits from local oversight, bank partnerships, and real-time auditing. From the user’s point of view, this token ticks all the boxes and helps build a brighter future.
3 main audiences for the cNGN:
- Merchants seeking transparency and lower volatility.
- Remittance recipients who want to avoid paying a huge markup or fees.
- Banks and fintechs that prioritise compliance more than anything else.
How cNGN Could Solve Real Problems in Nigeria’s Economy
A lot of people from Nigeria stay outside the country as the job market is not adequate to house them all. As a result, they send a large portion of their earnings back home and are often met with high fees and long settlement times. Given the circumstances, digital currency like cNGN has the potential to change the landscape entirely.
Along with bringing efficiency in the realm of remittances, this token has potential in:
E-commerce – Real-time payments can reduce both fees and other transaction friction.
Trade Settlements – Any kind of trade settlements can benefit from on-chain traceability.
Financial Compliance – cNGN if people adopt it at the earliest could help crack down fraud and illegal capital flows which translates to safer environment for all.
Challenges Ahead: Can cNGN Stablecoin Succeed Where eNaira Failed?
Though cNGN path looks promising, note that it is not guaranteed. The following aspects have to be addressed and at the end of the day, it isn’t a set and forget kind of project.
- Regulatory Clarity – As this stable coin gains more acceptance, consistent policies from the CBN are critical.
- Public Trust – As the eNaira wasn’t rolled out as anticipated, convincing Nigerians to try another digital currency would be a daunting task.
- Onboarding and Infrastructure – Mobile and internet access are growing, along with that user education and seamless integration with existing payment systems are vital for the success of this stable coin.
When it comes to stable coins especially designed for a specific country, the only way to success is through market driven adoption. Incentivising developers, merchants and end-users is the only way to go.
cNGN Stablecoin: Bottom Line
The eNaira’s tale turned out to be a cautionary one. The cNGN is trying to regain the spotlight and has good fundamentals. However, only time can tell us how it will unfold, and that is something the world will be watching closely.