If you’ve been dilly-dallying about whether to buy the cNGN, the Naira-backed stablecoin which launched on February 3, this may be a sign for you to lock in—not a financial advice. Quidax, another Nigerian provisionally-licenced crypto startup, has listed the stablecoin on its platform.
The blockchain payments space is evolving quickly. At a glance, the payment volume for stablecoins is already reaching $2.5 billion, with the velocity of money—which shows how much the global economy is driven by these digital currencies—peaking at $622 million. There’s much hype around stablecoins because there’s real substance to it.
First, stablecoins are cheap due to their operations on multiple blockchain networks. Second, in remittances, stablecoins are emerging as a cheaper alternative to sending money across Africa; we could soon see this utility apply to intra-continental payments.
This is the argument that applies to cNGN. Imagine traveling from Nigeria to Kenya on a business trip. Instead of dealing with currency exchanges, you could use cNGN to buy cKES, the stablecoin pegged to the country’s local currency Kenyan Shilling (KES). You could then convert cKES to KES and withdraw it to your bank account.
For this to work, there are two theories here: African local currencies need more stablecoin versions, and operators and regulators need to be more receptive to the technology, finding ways to work with it. The cNGN will likely see more utility with the listings on crypto exchanges that operate in multiple African markets, opening a gateway to remittance. However, for it to scale, there must be stronger collaboration between operators, regulators, and project developers.
