Nigeria Eyes Stablecoin Integration As Next Step In Digital Finance Evolution

The Nigerian government is turning its attention to stablecoins, digital tokens pegged to real-world currencies and seen as a more reliable alternative to volatile cryptocurrencies.

Central Bank of Nigeria (CBN) Governor Olayemi Cardoso announced the creation of a working group to explore how the country could integrate stablecoins into its financial system. He made the announcement during the annual meetings of the International Monetary Fund (IMF) and the World Bank in Washington, D.C.

The group, which includes representatives from the CBN, the Ministry of Finance, and other public institutions, will assess the economic, regulatory, and technological implications of establishing a national framework for stablecoins. These digital assets, backed by fiat currencies or commodities, are gaining traction in emerging markets looking to enhance financial inclusion while maintaining monetary stability.

According to Governor Cardoso, the central bank’s goal is to support financial innovation without compromising trust and stability in the monetary system.

The CBN’s review of stablecoins aligns with its broader strategy to modernize Nigeria’s payment ecosystem, one that has grown rapidly thanks to fintechs and digital platforms. Having launched Africa’s first central bank digital currency (CBDC), the eNaira, in 2021, Nigeria now aims to align its regulatory landscape with the increasing adoption of privately issued crypto assets.

The initiative could pave the way for clear guidelines governing the issuance, conversion, and regulation of stablecoins, giving the CBN greater oversight of digital capital flows.

Nigeria remains one of the largest cryptocurrency markets in the world. Between July 2023 and June 2024, the country processed an estimated $59 billion in crypto transactions—second only to India. Stablecoins accounted for nearly 40 percent of Nigeria’s crypto market last year and around 43 percent of retail transactions below $1 million. By 2025, projections suggest that roughly 22 million Nigerians (about 10.3 percent of the population) will own or use cryptocurrencies.

Nigeria’s booming fintech sector has long advocated for more flexible regulatory approaches that formally recognize stablecoins as legitimate payment tools. Several local money transfer and crowdfunding startups are already experimenting with stablecoins to facilitate cross-border payments and reduce reliance on the U.S. dollar.

However, the CBN continues to tread cautiously, warning of potential risks such as volatility, fraud, and the circumvention of capital controls.

Experts suggest that Nigeria could adopt hybrid regulatory models similar to those in Singapore or Dubai, where stablecoins are issued under specific licenses and backed by regulated financial institutions.

If successful, Nigeria could become the first major African economy to establish a comprehensive framework for stablecoins, marking another milestone in the country’s digital finance journey.

Central Bank of Nigeria (CBN) and Governor Olayemi Cardoso have announced plans for the launch of a national digital currency in Nigeria. This digital currency, also known as a central bank digital currency (CBDC), is set to be called the “eNaira.”

The eNaira Project

The eNaira project aims to provide a digital currency that complements the traditional paper naira. It is part of the Central Bank of Nigeria’s efforts to embrace financial technology and provide a secure, sovereign digital currency for Nigerians.

Benefits of the eNaira

• Financial Inclusion: The eNaira is expected to improve financial inclusion in Nigeria by providing a digital payment solution to unbanked and underbanked individuals.
• Efficiency: Digital currencies offer faster and more efficient transactions compared to traditional banking systems.
• Security: The eNaira aims to enhance security and reduce fraud risks associated with cash transactions.

“The eNaira will help to deepen financial inclusion, improve the efficiency of the payments system, and overall reduce the cost of cash handling.”

Implementation and Regulation

The CBN plans to pilot the eNaira starting in October 2021, and it will run alongside existing naira notes. The digital currency will be regulated by the central bank to ensure compliance with financial regulations and to safeguard users’ interests.

Stablecoin Comparison

Unlike private cryptocurrencies like Bitcoin, which have fluctuating values, the eNaira is designed to be a stablecoin pegged to the value of the traditional naira. This stability is intended to prevent the volatility often associated with cryptocurrencies.

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#Central Bank of Nigeria (CBN)#Governor Olayemi Cardoso#Nigeria#Stablecoin