cNGN, the Naira-backed stablecoin issued by WrappedCBDC, has launched on the Celo blockchain, creating a new channel for instant foreign exchange (FX) settlement and cross-border payments using digital tokens. The deployment comes as Nigerian businesses continue to grapple with persistent dollar shortages and naira volatility, challenges that have made timely cross-border settlement difficult through conventional banking channels.

The integration enables users to swap cNGN for dollar-backed stablecoins such as Tether's USDT through Textile FX, a cross-chain liquidity network. Textile FX reported that it had already onboarded 78 over-the-counter (OTC) traders and cross-border payment companies in Nigeria ahead of the launch.

The initiative aims to link a naira-denominated digital asset with global stablecoin liquidity, potentially offering fintechs and payment companies a faster and more cost-effective alternative to traditional banking rails for settling international transactions.

A stablecoin is a digital currency pegged to the value of a fiat currency, such as the US dollar or the Nigerian naira.

WrappedCBDC participated in the Nigerian Securities and Exchange Commission's (SEC) Regulatory Incubation (RI) programme, which permits companies to test and pilot tokenised products under regulatory supervision. The company was also included in the Central Bank of Nigeria's (CBN) anti-money laundering supervisory pilot on March 31 and was subsequently admitted into the SEC's Accelerated Regulatory Incubation Programme (ARIP) on July 2. Nigeria's SEC has been building out its digital asset regulatory framework since issuing rules governing the issuance, custody, and exchange of virtual assets in 2022, making these supervised programmes a key pathway for tokenised product providers seeking regulatory clarity.

According to WrappedCBDC, cNGN is backed one-for-one by naira reserves held in Nigerian commercial banks. The company also stated that it invests those reserves in treasury bills, money market funds, and fixed deposits.

As of August 7, cNGN had a circulating supply of approximately ₦2.5 billion ($1.8 million), cumulative trading volume of roughly ₦214.2 billion ($157 million), and 8,216 holders, according to the issuer.

"Nigeria is leading much of the world in stablecoin adoption," said Uyoyo Ogedegbe, cNGN's managing director, in a statement. "Our mission since launching cNGN has been to enable scalable, real-world use cases across Africa and beyond. Celo extends that work into one of the deepest stablecoin ecosystems, where cNGN now sits alongside more than 30 other stablecoins."

Textile FX reported that it processed more than $4 million in institutional trading volume during July.

Stablecoins have grown increasingly significant in Nigeria's digital economy as businesses and consumers look for alternatives to costly and often delayed cross-border transfers. Nigeria ranks among the largest crypto markets in sub-Saharan Africa and has experienced rapid adoption of dollar-backed stablecoins for payments, remittances, and savings.

Celo, a layer-1 blockchain designed for mobile-first payments with transaction costs of fractions of a cent, has positioned itself around real-world asset and local currency stablecoin use cases, particularly in emerging markets where smartphone penetration is rising and traditional payment infrastructure remains fragmented.

Celo announced that it will initiate a governance process to permit cNGN to be used for paying transaction fees on the network — a feature that could make the token more practical for everyday transfers and merchant payments.

The launch also broadens Celo's expanding stablecoin ecosystem, which the company said now comprises 32 fiat-backed stablecoins.

"Local currency stablecoins have been a core focus of the Celo ecosystem since mainnet launch in 2020, and Nigeria is one of the corridors where the case is clearest," said Markus Franke, Global Head of Stablecoins at Celo Core, in a statement. "Bringing cNGN to Celo puts the regulated Naira stablecoin on rails where transfers cost a fraction of a cent and settle in an instant, on a network powering payments for millions worldwide."